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05/25/2006 - Minutes PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, MAY 25, 2006 The City Council of Salt Lake City, Utah, met in a Work Session on Thursday, May 25, 2006, at 5 : 30 p.m. in Room 326, City Council Office, City County Building, 451 South State Street. In Attendance : Council Members Carlton Christensen, Van Turner, Eric Jergensen, Nancy Saxton, Jill Remington Love, Dave Buhler and Soren Simonsen. Also in Attendance : Cindy Gust-Jenson, Executive Council Director; Gordon Hoskins, Chief Financial Officer; Mary Beth Thompson, Payroll Accounting; Edna Drake, Business Licensing Administrator; Lehua Weaver, Council Constituent Liaison; Sylvia Jones, Council Research and Policy Analyst/Constituent Liaison; Gary Mumford, Council Deputy Director/Senior Legislative Auditor; Jamey Knighton, Human Resource Director; Jodi Langford, Employee Benefits Administrator; Louis Zunguze, Planning Director; Edwin Rutan, City Attorney; Brent Wilde, Community Development Deputy Director; Sam Guevara, Mayor' s Chief of Staff; Rocky Fluhart, Chief Administrative Officer; Sim Gill, City Prosecutor; Alison McFarlane, Senior Advisor for Economic Development; Tim Rodriguez, Risk Management Specialist; Jennifer Bruno, Council Policy Analyst; Kevin Bergstrom; Public Services Deputy Director; and Beverly Jones, Deputy City Recorder. Councilmember Buhler presided at and conducted the meeting. The meeting was called to order at 5 : 36 p.m. AGENDA ITEMS #1 . 5 : 36 : 56 PM RECEIVE A BRIEFING REGARDING THE MAYOR' S RECOMMENDED BUDGET FOR THE BUSINESS LICENSE FEE FOR FISCAL YEAR 2006- 07 . View Attachments Mary Beth Thompson, Edna Drake, Gordon Hoskins, Alison McFarlane and Gary Mumford briefed the Council from a power point presentation and the attached handouts . Councilmember Jergensen said he wanted a recommendation from the Business Advisory Board and the Vest Pocket Coalition on the proposed fee adjustments . #2 . 6 :28 : 39 PM RECEIVE A BRIEFING REGARDING THE MAYOR' S RECOMMENDED BUDGET FOR THE INSURANCE AND RISK MANAGEMENT FUND FOR FISCAL YEAR 2006-07 . View Attachments Jodi Langford, Gordon Hoskins, Sylvia Jones, Tim Rodriguez and Jamey Knighton briefed the Council from the attached handouts . Councilmember Christensen asked if seasonal employees were hired back. Mr. Hoskins said yes . Councilmember Christensen said the Golf Division had proposed making a group of full-time employees seasonal . He said when the season was up seasonal employees went on unemployment 06 - 1 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, MAY 25, 2006 insurance . Mr. Hoskins said the primary benefits gained were pensions, health insurance, etc. Councilmember Christensen asked if the City was doing this to skirt pension obligations . He asked that this information be provided. #3. 6 : 58 : 51 PM DISCUSS BUDGET FOLLOW-UP ON UNRESOLVED ISSUES . View Attachments Gary Mumford, Sylvia Jones, Jennifer Bruno, Lehua Weaver, Kevin Bergstrom, Rocky Fluhart, Louis Zunguze and Gordon Hoskins briefed the Council from the attached handouts . Councilmember Buhler said Issue 1 was Animal Services ($100, 000 increase) . Councilmember Buhler said this issue would not be resolved tonight. Councilmember Buhler said Issue 3 was carpet in One-Stop Shop and Item 4 was a cemetery fee increase. All Council Members were in favor of both items . Councilmember Buhler said Item 5 was an enhanced level of special events ($168, 000 new funding) . Councilmember Jergensen asked how many events were City, extra City or non City events . He asked if the City charged for a few events what the additional revenue would be . Mr. Bergstrom said he would get that information to the Council . Councilmember Buhler said Item 6 was the Fire Department retirement incentive ($45, 000) . He said more information was needed. He said he wanted to find money to do something significant on a one time basis to encourage early retirements for both police and fire. He referred to Item 8, fire permit fees ($126, 000 increase) . He asked if this issue had been withdrawn by the Administration. Ms . Gust-Jenson said not officially. Mr. Fluhart said this item had been listed in two places . Ms . Gust-Jenson asked for an e-mail to let Council staff know what the Administration wanted the Council Office to do. Ms . Gust-Jenson said Item 11, Grant Tower, the Administration was not able to attend the meeting. Councilmember Buhler said Item 12 was Justice Court. All Council Members were in favor of extending the four contract employees to June 30, 2007 at a cost of $90, 266 . Councilmember Buhler said Item 13 was Legal Defenders ($148, 368) . The majority of Council Members were in favor of a $75, 000 increase. Councilmember Buhler said Item 14 was the Leonardo addition to the old library building. He said this item would remain on the list. Councilmember Buhler said Item 15 was the Mounted Horse Patrol ($50, 000 City portion) . Ms . Weaver said staff had not received information from the Police Chief yet . Councilmember Buhler said this item would be held for additional information. He said Item 16 was the new Community Development Planner position ($70, 000 increase) . The majority of the Council was in favor of the position. Councilmember 06 - 2 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, MAY 25, 2006 Buhler said Item 17 was the new Community Development positions - One Stop Shop ($367, 124) . All Council Members were in favor of funding the four positions . Councilmember Buhler said Item 18 was the new Management Services position - Deputy Treasurer ($75, 000 increase for 10-months) . Councilmember Buhler said they would hold the position until funding was found. He said Items 19-28 were new positions . A discussion was held. Councilmember Buhler said he was not comfortable straw polling these positions yet. He said more information was needed. Councilmember Buhler called for a straw poll on Item 24, new Prosecutor' s Office positions ($106, 820 increase) . The majority of the Council were not in favor of making a decision at this time. Councilmember Buhler said Item 29 was Ongoing CIP funding. He said any additional one-time money left over would go into the CIP above the percentage recommended in the Mayor' s budget. All Council Members were in favor. Councilmember Buhler said Item 30 was Property Tax Revenue. He said the Council began their budget discussions without property tax increases . He asked if Council wanted to revisit this issue . All Council Members wanted to continue to work without a tax increase . Councilmember Buhler said Item 32 was YouthCity program coordinators ($150, 000 increase) . He said they had received additional information regarding a policy shift. He said the Council needed to read the information before making a decision. He said Item 36 was Sister Cities ($5, 000 increase) . The majority of the Council wanted to raise the funding to $7, 500 . #4 . CONSIDER A MOTION TO ENTER INTO EXECUTIVE SESSION, IN KEEPING WITH UTAH CODE, TO DISCUSS LABOR NEGOTIATIONS PURSUANT TO UTAH CODE ANNOTATED § § 52-4-4 AND 52-4-5 (1) (a) (ii) . No Executive Session was held. #7 . REPORT OF THE EXECUTIVE DIRECTOR INCLUDING A REVIEW OF COUNCIL INFORMATION ITEMS AND 8 : 27 : 19 PM ANNOUNCEMENTS . No report was given. See File M 06-5 for announcements . The meeting adjourned at 8 : 28 p.m. 06 - 3 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, MAY 25 , 2006 Council Chair Chief Deputy City Recorder This document along with the digital recording constitute the official minutes for the City Council Work Session held May 25, 2006 . bj 06 - 4 SALT LAKE CITY COUNCIL STAFF REPORT DATE: May 23,2006 SUBJECT: Proposed Business License Fee Adjustments Increase of$1,323,379 AFFECTED COUNCIL DISTRICTS: Citywide STAFF REPORT BY: Gary Mumford ADMINISTRATIVE DEPT. Management Services AND CONTACT PERSONS: Gordon Hoskins,Finance Director;Mary Beth Thompson,Accountant KEY ELEMENTS: The House Bill 98 of the 1997 Legislature required that municipal license fees be reasonably related to the costs of the services provided (UCA 10-1-203). The legislation requires cities to analyze their business license fees and separate the fees into three categories: 1) Fees reflecting the cost of licensing,inspection,and related administrative costs: a. Including the"Base Fee" that is charged to every business. (Currently$70 for a regular business and$50 for a home-based business;proposed to move to$95 for a regular business and$90 for a home-based business.) The base fee is charged to all businesses in the City and includes the actual direct costs associated with providing a business license: i. Total Business License Division costs ii. Basic fire inspection iii. Fire administrative costs b. Including the costs pertaining to the regulation of certain types of businesses (special regulatory). c. It should be noted that some of the businesses would only be charged the"Base Fee" in this category,and others may also be charged the"Special Regulatory Fee." 2) Fees relating to any disproportionate cost of services: a. Charged to certain businesses which,by the nature of their business,create increased demands on City services,particularly Police and Fire services. b. Businesses that create disproportionate costs range from automobile dealers and clothing stores to banks and grocery stores. Electronic goods sales also have disproportionate costs (the complete list is included in the ordinance under Schedule 2)while sexually oriented businesses and alcohol businesses are not charged disproportionate costs. The Administration is proposing not charging disproportionate fees to businesses that pay regulatory fees. c. A portion of the cost of disproportionate services could not be allocated methodically to any specific business classification. This cost was allocated to all businesses in the form of an employee fee that is based on the total number of employees working in the City. 3) Fees relating to enhanced level of services: The City does not assess any fees relating to an enhanced level of service. 1 The legislation requires that a cost analysis be made at least every five years. The Administration recently updated the analysis and is proposing adjustments to business license fees. The City has discretion in how the fees are assessed. The Administration's proposal is referred to by the Administration as a "hybrid" because the Administration evaluated each category and is recommended a focus on special regulatory fees in some cases and in disproportionate costs of services fees in others. Because this issue is complex, the Administration will be prepared to make a presentation at the Council's briefing session. MATTERS AT ISSUE: Business license fees have not been updated since June 2000. City service costs have increased during the past five years because of city employee salary adjustments and other inflation related expenses. Some costs determined by the study are quite different from the last study because city procedures have changed or because the study methodology is more precise. The budget for business license fees for the current fiscal year (2005-06) was $5,088,300. The Administration is projecting growth of$142,000. Additional revenue from the proposed fee adjustments is forecasted to be$1,323,400, which is an increase in revenue of 26% over fiscal year 2005-06. Of this amount, approximately 12% is attributable to inflation(CPI) since the last fee adjustment, according to the study assumptions. A previous City Council in 1999 set two basic policies relating to business license fees: (1) regulatory fees were to be set to recover 75% of actual costs,and (2) each regulatory fee would not be increased by more than 100% in any one year. The proposed ordinance reflects some major policy shifts including: • Disproportionate service fee has been added to those businesses that do not pay regulatory fees. • Regulatory fees are set to recover one of three cost recovery rates (50%, 75%, or 100%) depending on the amount of disproportionate service costs. • Regulatory fees were increased by the average consumer price index over the past five years (12%) if 50% of cost recovery would have more than doubled the regulatory fee. • Non-profit 501c3-type organizations will be required to obtain a business license. Proposed fees: a. Base fee: A base fee is an annual business license fee per place of business covering the costs of licensing, inspection, and related administrative costs. The base license fee is proposed to increase from$70 to $95 (36% increase), and the base fee for a home occupation license is proposed to increase from$50 to$90 (80% increase). The City currently has 11,178 non-home occupation licenses and 2,477 home occupation licenses. Each$5 increase to the base fee for non-home occupation license results in$55,890 of additional revenue. Each$5 increase to the base fee for home occupation license results in $12,385 of revenue. 2 b. Regulator fees: Certain business license applications require additional processing activities such as criminal background checks, and interviews. Some businesses require ongoing regulatory services to insure legal compliance and public safety. The Administration is proposing adjustments to regulatory fees both up and down based on the study of actual direct costs. Some regulatory fees need to be eliminated because the City doesn't provide any additional regulatory services. See"regulatory fees" section on attached list of proposed business license fees(Exhibit 1). c. Disproportionate service fees: Some businesses,by the nature of the business,create increased demand on the City's Police and Fire Departments. The study determined that a disproportionate level of police and fire/medical municipal services are provided to certain businesses in comparison with the level of services provided to other businesses and to residents within the City. The Administration grouped and allocated costs for services that could be specifically identified into common business classifications. Where the costs can be specifically identified,licensing fees are proposed to recover a portion of these costs. See"disproportionate fees" on the attached list of proposed business license fees (Exhibit 1). See section"f" below for a discussion on the proposed percentage of cost recovery. d. Employee fee: A portion of the cost of disproportionate services could not be allocated methodically to any specific business classification. This cost was allocated to all businesses in the form of an employee fee that is based on the total number of employees working in the City. The fee per employee is proposed to increase from$10 to$14. There are currently 133,200 employees reported to the City for business license purposes. For each$1 increase to the fee, the forecasted revenue is$133,200 for a total increase of $532,800. e. Decreases in some fees: The study indicates that for about 30 types of businesses current fees are in excess of actual costs. State law requires that licensing fees be reasonably related to the costs of the services provided. The Administration is proposing that some fees be reduced,which equates to about$190,000 of revenue. Among the fees proposed to be reduced is the per-unit fee for licensing housing apartments;to be reduced from$12 per unit to$7 per unit for a decrease in revenue of$98,000. Since there are 21,400 apartment units licensed,each$1 change in the fee represents$21,400. The Council may wish to ask the Administration for some of the justification to reduce the fee since the actual regulatory costs for apartments is$15 per unit according to the study. (Note: There are disproportionate costs for police and fire services in addition to the$15 regulatory costs.) 3 f. Percent of cost recovery: In the past the City has not charged a separate licensing fee for disproportional costs except for a fee per employee. The Administration is now proposing to recover a portion of disproportional costs based on the following table. The first two columns relate to disproportional cost recovery. In some cases only a small fraction of the City's costs are proposed to be recovered. In the past the City has generally set regulatory fees to recover 75% of costs. The Administration's new proposal contains three cost recovery percentages (50%, 75%, 100%) based on the amount of disproportionate costs. (See column three.) However, some regulatory fees are proposed to increase only 12% because the regulatory fee would more than double at a 50% level. The 12% increase was based on CPI since the last fee adjustment. Proposed Recovery of Service Costs Proposed Proposed Percent of Disproportionate Disproportionate Regulator Cost Cost Range Cost Recovery Recovery $0-99 $15 50% $100-199 $20 50% $200-299 $25 50% $300-399 $35 50% $400-499 $45 50% $500-599 $55 75% $600-699 $65 75% $700-799 $75 75% $800-899 $85 75% $900-999 $95 75% $1000-1999 $100 100% $2000-2999 $120 100% $3000-3999 $130 100% $4000-4999 $140 100% $5000-9999 $150 100% $10000- $200 100% Council Members may wish to note that an additional$75,000 could be gained if those fees that are proposed at the 12% increase level were instead set at the 75% cost recovery with no fee being set at more than doubled the current fee. Further, an additional$80,000 of revenue could be achieved by setting rates to recover at least 75% of costs rather than recovering only 50%. The additional revenue from these changes could be used to reduce the base fee or fee per employee. Comparisons with other cities: The Administration made a comparison of the proposed fees with certain other Utah cities. You will note from the attached comparison schedule (Exhibit 2) that Salt Lake City's proposed base fee is greater than most all of the other cities while some regulatory or disproportionate fees are below what other cities charge and some fees are above what other cities charge. Most other cities haven't updated their cost studies for several years, which could be part of the reason for the lower fees. 4 Business Community Input: The study and business license fee proposal was not finalized until a couple of weeks before the Mayor presented his budget, The Administration did not obtain input or feedback from the Business Advisory Board,Vest Pocket Coalition or others in the business community. The Council may wish to ask whether the Administration has had the opportunity to obtain feedback from the business community. Hazardous materials permit fees: The Administration is proposing a separate fee ordinance for services performed by the Fire Prevention Bureau. The cost study for these fees analyzed both direct costs and portions of costs from throughout the city that have been allocated to the Fire Prevention Bureau. The Administration did not follow the policy set by the previous Council of charging 75% of costs and not increasing any fee more than 100% in any one year. The Council may wish to determine whether it supports the approach established by the previous Council and apply the approach consistently to the hazardous materials fees. The proposed ordinance includes some services for which fees where not assessed in the past(i.e. open burning,flame effects, assembly, trade show, suppression/detection/alarm systems,and hot works operations. As a result of the business license cost study, any costs relating to the fire hazardous inspection services have been removed from the regular business licensing fee ordinance. A listing of the fees comparing the current charge with the proposed charge is included on Exhibit 3. Revenue from fire permits is forecasted to increase from$171,000 to$447,224,which is a 162% increase in fire permit fee revenue. This is not the true increase for the general fund as a whole since part of the Fire Prevention Bureau costs were included in the previous study for setting business licensing regulatory fees. The proposed fees have been set to recover 100% of costs. Some of the fees will more than double. If fees were set so that fees didn't increase more than double than forecasted revenue would have to be decreased by$195,000. For example,the fee for a fire incident report is proposed to increase from$15 to$95. The Council may wish to ask the Administration for more information about the charge for the fire incident report, and whether this report is similar in any way to a police incident report. Further the Council may wish to ask whether it would be considered public information under the City's GRAMA ordinance and would be subject to a fee such as those charged for other public records. In speaking with the Fire Department,staff understands that it is a one-hour process,performed by an office staff person. Recommendation#104 of the Council's recent audit of the Fire Department related to these fees. The auditors recommended fees for additional services that the Fire Department is performing. The proposed ordinance adds an additional seven new fees. The Council may wish to ask whether fees should be established for any additional fire inspection services. The auditors also recommended evaluating the feasibility of Building&Licensing Services issuing all licenses and permits. The Council may wish to ask the Administration whether the fire inspection applications and payment of fees can be handled at the same time as the application for a business license at the City's Business License Office. This consolidation could be similar to the proposed building permit one-stop shop. 5 It should be noted that the Council staff has requested information from the Administration on whether the fees for Fire Department plan review should be charged, given that the Administration is proposing to fulfill that function at the permit one-stop shop rather than in the Fire Department. Staff has not received a written response,but a number of conversations have been held. OPTIONS: • The Council may wish to consider approving the business license fee ordinance as proposed. • The Council may wish to increase or decrease some of the proposed fees or change the overall cost recovery percentage amount. • The Council may wish to defer action on the business license fee schedule until the Administration obtains business community input and to give the Council and Administration time to fine tune the proposal. Perhaps a Council subcommittee could work with the Administration to refine the proposed fees. Note: The non-taxi ground transportation inspection fees are not included in the proposed business license revenue or in police revenue. The Administration hasn't concluded its analysis of where these ground transportation background checks will be handled. An ordinance adopted last year provides that a fee of$75 ($100 beginning December 8, 2006) is to be paid by ground transportation drivers at the time the application is filed. The Council may wish to ask the Administration whether the City is providing background checks on non-taxi ground transportation drivers and whether the fee per the ordinance is being charged and collected. CHRONOLOGY: • February 1997-The State Legislature passed a bill that required municipal license fees to be related to municipal costs. The Administration formed a team to review and analyze costs associated with licensing and regulating businesses. • January 1998-The Council adopted an amendment to the business license fee ordinance adjusting the fees. The Council requested that the Administration continue its study of the costs of services provided compared to regulatory fees charged. • November 1998-The Administration completed a second study of costs associated with business licenses,and the Council adopted an amendment to the business license fee ordinance adjusting the fees. • June 1999-The Administration updated business license fees in connection with the annual recommended budget. The Council adopted some fee adjustments. • June 2000-The Administration updated business license fees in connection with the recommended budget for fiscal year 2000-01. The Council again adjusted and updated some license fees. • May 2006-The Administration completed a new study of the costs associated with business licenses and forwarded a proposed ordinance amendment to the City Council in connection with the mayor's recommended budget. 6 • Exhibit 1 PROPOSED BUSINESS LICENSE FEE ADJUSTMENTS Increase Number of Number Actual Current Proposed Increase Percent Decrease) Businesses of Units Costs Fees Fees (Decrease) Change Revenue , RASE FEE: Jon-Home Occupation License 11178 $ 189 $ 70 $ 95 $ 25 35% $274,395 per business ' °''Home Occupation License 2477 180 50 90 40 80% 99,491 per business EMPLOYEE FEE: Employees-Full Time 116953 502 10 14 4 40% 467,812 per employee Employees-Part Time 16251 502 10 14 4 40% 65,004 per employee REGULATORY FEE: ALCOHOL LICENSES Beer Class A, i.e.,sold by grocery/convenience 158 1,746 190 217 27 14% 4,266 per license Beer Class B,i.e.,served in restaurants 195 1,617 150 315 165 110% 32,241 per license Beer Class C,i.e.,bars,lounges,and taverns 26 785 252 160 (92) -36% (2,391) per license Beer Class D Special Events 53 744 150 129 (21) -14% (1,097) per license Beer Class E-recreation facilities/arenas 10 881 170 233 63 37% 626 per license Beer Class F Brew Pubs and Microbreweries 1 213 150 107 (43) -29% (43) per license Beer-Government 5 133 150 66 (84) -56% (418) per license Seasonal Beer License 1 704 150 100 (50) -34% (50) per license Liquor Consumption,i.e.,mixed drinks/wine 256 801 150 12 (138) -92% (35,261) per license AUCTION - Auction Business 8 303 150 66 84( ) -56% (668) per business Auctioneer 20 222 80 111 31 38% 615 per license TOWING AND WRECKING - Automobile Towing and Wrecking 42 80 - (80) (3,360) per business HOUSING - Apartments 1494 21424 136 12 7 (5) -38% (98,174) per unit Hotels/Motels 76 10904 59 3 5 2 55% 17,839 per room Rooming and Boarding Houses 26 462 53 3 13 10 317% 4,400 per room RV Parks and Campgrounds 6 222 20 2 - (2) (444) per space SECOND HAND CD Exchange Stores 12 954 300 309 9 3% 111 per business Computer Exchange Stores 1 468 300 66 (234) -78% (234) per business Pawnbrokers 14 20,445 1,000 1,118 118 12% 1,646 er business ntique Dealers 19 775 - 220 220 4,176 per business ,ether Used Merchandise 32 468 - 66 66 2,127 per business SEXUALLY ORIENTED Outcall Agencies 14 7,316 800 894 94 12% 1,317 per agency Outcall Employees- - Renewal Escorts 52 1,839 600 671 71 12% 3,668 per employee New Escorts 1 1,906 600 671 71 12% 71 per employee Non Escort Employees 44 222 140 156 16 12% 724 per employee Seminude Dance Bar 4 331 290 324 34 12% 136 per business Seminude Dance Agency 4 2,759 290 324 34 12% 136 per agency SOB Employees- - Dancers 121 160 179 19 12% 2,276 per employee SOB Adult Business 0 288 290 324 34 12% - per business SOB Nude Entertainment Business 0 288 300 335 35 12% - per business SOB Nude Entertainment Agency 0 2,759 300 335 35 12% - per business SOB Adult Photography Business 0 288 140 156 16 12% - per business SOB Transfers 0 222 140 156 16 12% - per business SOLICITORS Solicitors 0 133 80 66 (14) -17% - per business Sidewalk Vending/Snow Cart 36 284 70 142 72 103% 2,593 per business Ice Cream Vendors 6 284 - 142 142 852 per business Pedicabs 0 284 - 142 142 - per business TRANSPORTATION OF PERSONS Taxi Cab Companies: 5 - Taxi Cabs&Limousines 278 94 - - per vehicle Certificate of Convenience 5 1,935 100 112 12 12% - per business Other Ground Transportation 89 1,557 - - - - per business Courtesy Vehicle Service 0 - - - - per vehide Medical-related Transportation 3 - vehicles 15 69 - 35 35 520 per vehicle -ertificate of convenience 3 1,935 100 112 12 12% 35 per business I rse Drawn Carriage Businesses 2 69 40 66 26 66% 53 per business carriages 19 - 35 35 659 per carriage certificate of convenience 2 100 112 12 12% 24 per business Page 1 Exhibit 1 Increase Number of Number Current Proposed Increase Percent Decrease) Businesses of Units Fees Fees (Decrease) Change Revenue MISCELLANEOUS Class A-Private Club,i.e.,country clubs 1 315 $ 330 $ 158 $ (172) -52% $ (172) per busines Class B-Private Club,i.e.,fraternal club 3 315 330 158 (172) -52% (517) per busines:..- Class C-Private Club,i.e.,dining club 8 315 330 158 (172) -52% (1,379) per business Class D-Private Club,i.e.,drinking club 82 819 330 237 (93) -28% 7,667) per business Class E-Private Club,i.e.,s•ecial events 0 133 - 66 66 - - per business Tobacco License-includes Grocery, Bars,etc. 216 854 30 - (30) -100% (6,480) •er business Businesses with Amusement Devices/Billiards 147 123 30 - (30) -100% (4,410) per business Amusement Devices/Billiards 773 2 2 2 - per device Locksmiths 4 133 - 111 111 443 per business Dance Hall 46 143 80 66 (14) -17% (623) per business Motion Picture/Theater 7 1,564 80 100 20 25% 140 •er business Live Entertainment/Concerts 107 174 70 66 (4) -5% (379) per business Fireworks-Outside 13 -- 60 25 (35) -59% (459) per business 0 Dating and Marria•e 80 111 31 38% - per business DISPROPORTIONATE FEE: - 501C3-type organizations:shelters,etc. 28 200 - 200 200 5,600 per business Air Transportation Services Including Airlines 50 150 - 150 150 7,500 per business All Other Retail/Wholesale Sales 1043 35 - 35 35 36,505 •er business All Other Services 3333 20 - 20 20 66,660 per business Automobile Dealers 79 45 - 45 45 3,555 per business Automobile Parts Sales 121 100 - 85 85 10,285 per business Automobile Rental Agencies 27 20 - 20 20 540 per business Automobile Repair 203 45 - 45 45 9,135 per business Automobile Towing and Wrecking 47 -- 80 15 (65) (3,055) per business Banks 78 100 - 100 100 7,800 per business Businesses with Amusement Devices/Billiards 147 -- 30 20 (10) -33% (1,470) per business Child Care Facilities 29 -_ 100 - 100 100 2,900 per business Clothing Sales Mil- 75 _- 75 75 16,575 per business Construction Businesses 20 20 20 6,360 per business Convalescent Home/Retirement 16 120 - 120 120 1,920 per business Dance Hall(Renewal) 30 20 80 15 (65) (1,950) per business Dry Cleaning and Laundry 72 100 - 100 100 7,200 per busines& Electronic Goods Sales 67 150 - 120 120 8,040 per business Engineering 150 20 ME 20 20 3,000 •er business Furniture Sales 123 120 45 45 5,535 per business Gasoline Stations 0 120 - 120 120 - per business Grocery and Convenience Stores 0 100 - 100 100 - per business Hardware Sales 82 100 100 100 8,200 per business Health Care Facilities incl Hospitals 578 35 35 35 20,230 per business Interior Design Businesses 117 20 20 20 2,340 per business Janitorial Businesses 186 55 55 55 10,230 per business Lawyers 409 15 15 15 6,135 per business Limousine Companies 32 _- 15 15 480 per business Live Entertainment/Concerts(Renewal) 89 70 15 (55) -79% (4,895) per business Manufacturing Businesses 50135 35 17,535 •er business Motion Picture/Theater(renewal) 47 80 75 (5) -6% (235) •er business Other Ground Transportation; includes Buses a 89SEM MIIIM= 100 100 8,900 per business Real Estate Businesses 38015 15 5,700 per business Restaurants, including Cafeterias. 0 75 75 - per business RV Parks and Campgrounds 6 222 20 900% 3,996 per space Shipping Companies _ 91 35 35 3,185 per business Sporting Goods Sales 268 35 IE 35 35 9,380 per business Storage Services 62 45 45 45 2,790 per business Taxi Cab Businesses 5 _- 15 15 75 per business Tobacco License-includes Grocery, Bars,etc. 216 30 85 55 183%0 11,880 •er business Various Business Services 1653 20 20 33,060 per business Wholesale Gas and Oil(natural resources) 26 20 240 20 (220) -92% (5,720) per business Page 2 0 cn - 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LL' c c •f0 LL • C m . O a } rn E o a ct > c v, o w - i0 w o r a) o o . c E •y Y Z C7 . w .., QwvEO . _ 0 .0 - n- aa• oaiE ~_ f0 `- . 0Eo a t....� 000 = mcwocto Q m m c W 1- o m V _U Q 0 . - N •E _ co v C o . . ai c Z 0 0 ` li m o u`6) `m a) U « •- 0 , y" Cl) y V) 0 C O y 8 0 0 0 O W ee E . 0 c 0 .. O a) . w O a) L L.. = a o Epo .o Z •m afi, m m 0 _ E , cco o `� o . � _ c >c •rnm 0 o a c' m y m o00 00c4,322 ) tn � U (0UU3g01 < � � � ,§ 21 c m O o c .- m 2 a) c o (a a) a) oL - - co co OQmUowE00 = - _JMctxw5QQ Exhibit 3 I, Proposed Fire Prevention Fees Actual Annual Cost per Current Fees Number of Business per Bus. Proposed Business Type Inspections (Ceiling) (Fire) fees General- minimal use and/or storage 256 $391 $125 $390 Storage Sites-warehouses, fuel storage for generators 97 $440 $125 $440 Tank Inspections 21 $587 $250 $585 Gas Stations 102 $367 $175 $365 Large Dispensing Sites-wholesale gas&oil. 26 $587 $175 $585 Production 26 $685 $250 $685 Fireworks Public Display Outdoor 30 $685 $350 $685 Fireworks Public Display Indoor 13 $489 $150 $485 Fireworks Public Display Delta Center 1 $685 $100 $685 State Licence Health Care 82 $489 $50 $485 Hospitals 4 $685 $400 $685 I lc Box-small 16 $130 $30 $130 Lock Box- large 16 $230 $130 $230 UFIR- Utah Fire Incident Report 67 $98 $15 $95 Re-Inspections 430 $245 $0 $240 Blasting 2 $587 $500 $585 High Rise 34 $880 $350 $880 Open Burning New $391 $390 Flame effects before an Audience New $293 $290 Temporary structures, tents, canopies New $400 Place of assembly(fee based on square feet) New $300-$1250 Exhibit and trade shows (fee based on square feet) New $175-$700 Suppression, alarm or detection system installation New 10% of system cost Hot works operations New $300 ISSUE: BUSINESS LICENSE FEES POLICY ANALYSIS In 2005, the Administration conducted a City costs associated with business review of business license fees as activities were determined by analyzing required by state legislation. The study direct, indirect and disproportionate identified the actual costs associated activities. The last study, conducted in with issuing business licenses. 1998, was used as a framework for the current study using FY 2004 costs. The analysis resulted in a comprehensive BACKGROUND database of fully-loaded costs and includes several process changes that Utah Code 10-1-203 5(a) requires that have occurred since 1998. The analysis revenue received from municipal was fine tuned to create a better business license fees be based on the framework for the future, as well as a costs of the services provided. The law more accurate fee structure for the years requires a cost analysis every five years. to come. Salt Lake City conducted an analysis to determine costs based on FY 2004 actual Base Fee Costs costs. The base license fee is charged to all Utah Code requires cities to analyze all businesses in the City and consists of the business license costs based on the actual direct costs associated with following categories: getting a business license. Costs include total Business License Division costs, 1) Direct and/or indirect costs - fire inspection and fire administrative These costs are broken out by(1) costs. costs charged to every business (base fee) and (2) costs Special Regulatory Costs pertaining to the regulation of certain types of businesses Certain business license applications (special regulatory). require additional processing activities 2) Disproportionate impact of such as police service application services - Refers to certain types processing, criminal background checks, of businesses which, by the interviews, identification photographs, nature of their business, create and fingerprints. In addition, these increased demands on City businesses require ongoing dedicated services, specifically those regulatory services performed to insure. provided by the Police and Fire legal compliance and public safety. The Departments. time requirement for these activities was 3) Enhanced services costs- Costs calculated and additional fees are associated with providing a assessed to affected businesses. higher level of City services above the basic level of services Disproportionate Impact Costs to sections of the municipality. The analysis determined that a disproportionate level of municipal Create a Fee Associated with the services are provided to certain Disproportionate Impact businesses within the City in comparison Salt Lake City could adopt a fee with that level of services provided to schedule based on a range of costs other businesses and to residences within (starting at $15 and going up to $200) the City. Costs for such services that along with direct/indirect costs, and a could be specifically identified were Consumer Price Index associated with grouped into common business the current fee charged. classifications. These disproportionate costs were allocated to each business class and additional fees were assessed RECOMMENDATION to these classes. The Administration recommends a hybrid of the proposals stated in the A portion of the cost of disproportionate alternatives. Depending upon the services could not be allocated disproportionate impact created, a methodically to any specific business direct/indirect cost level of 50%, 75%, or classification. This cost was, therefore, 100% of regulatory costs will be applied allocated to all businesses in the form of along with disproportionate costs that an employee fee that is based on the total have no special regulatory cost number of employees working in the associated with that type of business. A City. per employee fee of$14 is applied to all businesses. If business types have fees that would increase more than 200%, the ALTERNATIVES CPI will be applied to their current fee. Business as Usual Salt Lake City could continue to charge the same fees as it currently does through business licensing. This approach does not address the ever- increasing costs of issuing licenses and providing services to City businesses. Charge a Percentage of Regulatory Costs Only Salt Lake City could charge a business license fee based on a percentage of special regulatory fees only(i.e. 50%, 75%). This would increase revenue to help offset the costs for these services but does not address the huge disproportionate impact created by certain classes of businesses. SALT LAKE CITY ORDINANCE No. of 2006 (Amending Schedule 1 Business Licensing Regulatory Fees and Other Business Licensing Fees, and Enacting Schedule 2 Business Licensing Disproportionate Fees) AN ORDINANCE AMENDING SCHEDULE 1 OF TITLE 5, SALT LAKE CITY CODE, RELATING TO ADDITIONAL REGULATORY FEES FOR CERTAIN CLASSES OF BUSINESSES, SECTION 5.04.070, SALT LAKE CITY CODE, RELATING TO LICENSE FEES LEVIED, SECTION 5.05.130, SALT LAKE CITY CODE, RELATING TO APPLICATION FEES—FOR CERTIFICATE OR CERTIFICATE OF ADDITIONAL AUTHORITY, AND SECTION 5.05.135, SALT LAKE CITY CODE, RELATING TO FEES PERTAINING TO CERTIFICATES OF PUBLIC CONVENT IHNCE AND NECESSITY, AND ENACTING SCHEDULE 2 OF TITLE 5, SALT LAKE CITY CODE, RELATING TO DISPROPORTIONATE FEES FOR CERTAIN CLASSES OF BUSINESSES. NOW, THEREFORE, be it ordained by the City Council of Salt Lake City, Utah: SECTION 1. That Schedule 1 of Title 5, Salt Lake City Code, pertaining to additional regulatory fees for certain classes of business be, and the same hereby is, amended to read as follows: SCHEDULE 1 The following classes of businesses, listed with their subclasses and city object codes, shall be charged the following annual regulatory fees, in addition to the base license fee and the per b section 5.04.070 of this title, or its successor section. The listed fee includes the charge for one background check where required. For each additional background check per business there shall be a fee of one hundred and thirty-threeeighty dollars ($133.0080.00). City Additionut ON-eet leis-proPortlsnla-te Classes And Subclasses Of Businesses code Regulatory Fee 1. Pawnshop and secondhand dealer PAWNBROKER -1-20523 Disproportionate Ffee per business $1,000.001,118.00 SECONDHAND COMPACT DISK EXCHANGE DEALER Disproportionate Ffee per business 300.00309.00 SECONDHAND COMPUTER EXCHANGE DEALER Di sproportionateF$ee per business 300.0066.00 ANTIQUE DEALER Fee per business 220.00 OTHER USED MERCHANDISE Fee per business 66.00 2. Transportation vehicles CERTIFICATE OF PUBLIC CONVENIENCE & NECESSITY Fee per business (new application) 112.00 Fee per business (renewal) 112.00 HORSE DRAWN CARRIAGE 120726 Disproportionate Ffee per vehicicbusiness 40.0066.00 Fee per carriage authorized under certificate 35.00 TRANSPORTATION OF DISABLED PERSONS 2 Fee per vehicle authorized under certificate 35.00 3. Apartments APARTMENT UNITS 120111 Disproportionate Ffee per rental unit 12.007.00 4. Class A beeralcohol related business 120301 Disproportionate Ffee per businesslicense 8700217.00 5. Class B beeralcohol related business 120322 Disproportionate Ffee per businesslicense 150.00315.00 6. Class C beeralcohol related business 120323 Disproportionate Ffee per businesslicense 252.00160.00 7. Class D beer special events Disproportionate Ffee per event 150.00129.00 8. Class E beeralcohol related business 120301 Disproportionate Ffee per bi±sinesslicense 170.00233.00 9. Class F bBrew pubery/microbrewery alcohol related business 120318 Disproportionate Ffee per businesslicense 150.00107.00 10. Seasonal beer Fee per license 100.00 11. Class A private club Fee per business 158.00 4012. Class B pPrivate clubs class B alcohol related business 120309 D F€ee per business 330.00158.00 3 1113. Class C pPrivate clubs class C alcohol related business 1203-1-0 Disproportionate Ffee per business 330.00158.00 13. Temporary alcohol related'business 120305 Disproportionate fee per business 150.00 14. Class D private club 237.00 15. Class E private club 66.00 4216. Liquor consumption 120327 Disproportionate Ffee per businesslicense 150.0012.00 -1-417. Government owned alcohol related business 120311 1 Disproportionate Ffee per business 150.0066.00 1518. Auctioneer 120503 Disproportionate Ffee per auctioneer 80.00111.00 -1-619. Auction AUCTION HOUSE-TRANSIENT T3ispreportionate Ffee per business, per day 1.50.0066.00 (See Temporary merchant) 17. Vehicle towing and wrecking AUTO TOWING 120506 AUTO—WRECKING -- 120507 Disproportionate Fee per business -- 40.00 4-820. Room rental (other than apartments) BOARDING HOUSE 120101 4 Disproportionate fee per rental unit 3.00 HOTEL 120426 Disproportionate Ffee per rental unit 3-005.00 MOTEL 120427 Disproportionate Ffee per rental unit 3-:005.00 BOARDING AND ROOMING HOUSE 120428 Disproportionate Ffee per rental unit 3-0013.00 4-921. Entertainment CONCERT 120808 Disproportionate Ffee per exhibition room 70.0066.00 THEATER-LIVE 120819 Disproportionate Ffee per exhibition room 80.0066.00 THEATER MOTION PICTURE -2O820 Disproportionate Ffee per screen 80.00100.00 LIVE ENTERTAINMENT 120519 Disproportionate Ffee per exhibition room 70.0066.00 DANCE HALL 120512 Disproportionate Ffee per room 800066.00 2022. Dating/marriage 120538 Disproportionate Flee per business 80.00111.00 2123. Fireworks FIREWORKS-INSIDE 120543 5 FIREWORKS-OUTSIDE 120545 Disproportionate Ffee per location 60.0025.00 22. Gas/oil SERVICE STATION 120429 Disproportionate fee per vehicle fuel dispensing point 60.00 WHOLESALE OIL 120437 cr year) 210.00 WHOLESALE GAS 12043S — Disproportionate fee(total per year) 1,200,00 23. Tobacco related 120433 Disproportionate fee per business 30.00 2424. Sexually oriented ADULT BUSINESS 120555 Disproportionate Ffee per business 290.00324.00 SEMINUDE DANCING BAR 4-20557 Disproportionate Ffee per business 290,00324.00 SEXUALLY ORIENTED BUSINESS OUTCALL AGENCY120560 Disproportionate Ffee per businessagency 800700894.00 NUDE ENTERTAINMENT BUSINESS 120563 rope#anate Ffee per business 600.00335.00 NUDE AGENCY 120566 Disproportionate Ffee per business 600,000335.00 6 SEMINUDE DANCE AGENCY 120567 Disproportionate Ffee per business 298.00324.00 2525. Sexually oriented ADULT EMPLOYEE (NON-ESCORT) 120556 Disproportionate Ffee per employee 140.00156.00 SEMINUDE NONPERFORMER 120559 Disproportionate fce per employee 140-00 SEXUALLY ORIENTED BUSINESS OUTCALL 120562 NONPERFORMER(NON-ESCORT) Disproportionate Ffee per employee 140.00156.00 NUDE NONPERFORMER 120565 Disproportionate fee per employee 140.00 DANCE NONTERFORMER 120559 Same as Seminude Nonperformcr 140:00 2€26. Sexually oriented The fee contained in this section shall be prorated as follows: If 180 days or fewer remain before the employer's license expires, the fee shall be 50 percent of the full fee. If 181 days or more remain before the employer's license expires, the full fee shall be charged. SEMINUDE PERFORMER EMPLOYEE 120568 Same as Seminude Dance Performer NUDE PERFORMER EMPLOYEE -1-20564 Disproportionate Ffee per nude/seminude performer 160.00179.00 7 SEMINUDE DANCE PERFORMER 120568 Disproportionate Ffee per nude/seminude performer -1 0,00179.00 2-727. Sexually oriented business The fee contained in this section shall be prorated as follows: If 180 days or fewer remain before the employer's license expires, the fee shall be 50 percent of the full fee. If 181 days or more remain before the employer's license expires, the full fee shall be charged. SEXUALLY ORIENTED BUSINESS OUTCALL 120561 PERFORMER (ESCORT) Disproportionate Ffee per outcall performer 600.00671.00 2-828. Sexually oriented SEXUALLY ORIENTED BUSINESS TRANSFER rf159i3 Disproportionate Ffee per performer transfer 70,00156.00 2929. Sexually oriented business PHOTOGRAPHY, ADULT 120721. Di-spfoportionate regt t-E Flee per photographer -1-40- 0156.00 30. Nonalcohol private club CARD CLUB --• 120509 -- Disproportionate fee per business 80.00 PRIVATE CLUB CLASS A 120308 Dispropei,t-ienate fee per business —80440 7-1-30. Solicitor 420529 D-sprepe-r4ienate-Ffee per individual 8-070066.00 8 32. Temporary merchant TEMPORARY MERCHANT 120532 Disproportionate fee per day 150.00 TEMPORARY MERCHANT SPONSOR 120541 Disproportionate fee per day 120.00 33. Temporary merchant participant TEMPORARY MERCHANT PARTICIPANT 120542 Disproportionate fee per participant 20.00 J431. Amusement devices/billiards AMUSEMENT DEVICES 120801 Fee per device 2.00 BILLIARDS 120803 Di-sproportionate Ffee per device 2.00 32. Miscellaneous ICE CREAM VENDORS Fee per business 142.00 LOCKSMITHS Fee per business 111.00 PEDICABS Fee per business 119.00 SIDEWALK VENDING/SNOW CART Fee per business 142.00 9 SECTION 2. That Section 5.04.070, Salt Lake City Code,pertaining to license fees levied be, and the same hereby is, amended to read as follows: 5.04.070 License Fees Levied: A. Fees For Businesses Located In The City: There is levied upon the business of every person engaged in business in the City at a place of business within the City, an annual business license fee per place of business. The amount of the fee shall be the base license fee imposed under subsection B of this Section, plus: 1. The regulatory fee imposed under subsection C of this Section, if applicable; and 2. The disproportionate impact fee imposed under subsection DC of this Section, if applicable; and 23. The enhanced services fee imposed under subsection DE of this Section, if applicable. B. Base License Fee: The base license fee levied and imposed, covering licensing, inspection, and related administrative costs shall be as follows: 1. Home occupation businesses: ninety4r€ty dollars ($90.000-40). 2. Nonhome occupation businesses: ninety-fiveseventy dollars ($95.0070 00). C. Regulatory Fee: The regulatory fee levied and imposed, for indirect cost associated with doing business within the City, covering licenses listed under Schedule I of this title shall be as set forth thereunder. CD. Disproportionate Costs: 1. It is deteiririned by the City Council that a disproportionate level of Municipal services are provided to certain businesses within the City in comparison with that level of services provided to other businesses and to residences within the City,based on additional services provided to 10 such businesses and on disproportionate use of police, fire, transportation, and street maintenance services and the additional costs associated with increased usage of public facilities by employees. 2. The fee determined to be related to the disproportionate costs of such Municipal services is: a) fourteenten dollars ($14.0010.00)per employee for each and every full-time and part-time employee exceeding one, engaged in the operation of said business,based upon the "number of employees" defined in Section 5.02.005 of this Title or its successor, plus b) a designated disproportionate fee for the applicable businesses as set forth in Schedule 2-1 of this Title and made a part hereof by this reference. DE. Enhanced Services: It is determined by the City Council that Municipal services are provided to businesses within the Central Business District and the Sugar House Business District, as defined in the Zoning Ordinance, at a level which exceeds other geographic areas of the City. No enhanced service fee shall be charged said businesses at the present time. E . Multiple Rental Dwellings: An owner of multiple rental dwellings within the City shall be required to obtain one base license and to pay one base license fee for the operation and maintenance of all such rental dwellings plus a regulatory fee for disproportionate costs of regulation as set forth in subsections B and DC of this Section. FG. Fee For Businesses Located Outside The City: There is levied upon every person engaged in business in the City, not having a place of business in the City, and not exempt as provided by Section 5.04.040 of this Article, or its successor, the same license fee as if such place of business were located within the corporate limits of Salt Lake City. 11 GH. Nonrefundable Application Fee: In the event any initial or renewal business license application is denied by the City or is withdrawn by the applicant, the Cit} shall be entitled to retain the sum of thirty five dollars ($35.00) as a nonrefundable business license application fee from any license fees paid or payable to the City, unless another nonrefundable business license application fee is otherwise provided for under the ordinances of the City. HI. Renewal Notices: Any notice or renewal reminder provided by the City in connection with this Section may be sent by ordinary mail, addressed to the address of the business as shown on the records of the City's licensing office, or, if no such address is shown, to such address as the licensing office is able to ascertain by reasonable effort. Failure of a business to receive any such notice or reminder shall not release such business from any fee or any penalty, nor shall such failure operate to extend any time limit set by the provisions of this Chapter. SECTION 3. That Section 5.05.130, Salt Lake City Code, pertaining to application fees—for certificate of or certificate of additional authority be, and the same hereby is, amended to read as follows: 5.05.130 Application Fees-For Certificate Or Certificate Of Additional Authority: An application for a certificate of public convenience and necessity or an application for a certificate of additional authority hereunder shall be accompanied by a payment of a fee of one hundred and twelve dollars ($11200.00), the same to be applied toward payment of the costs of hearings and proceedings on same. If the costs to the City of such hearings and proceedings pdcant shall-reimburse the it) r-s 1 excess. if the cost is less than one hundred dollars ($100.00), the-City-shall refiind-t-he-di er-enee4e-the 12 applicant after the final conclusion of such h d proceedings. Said fee shall be in addition to the fees required to be paid under Section 5.05.135 of this Article, or its successor. SECTION 4. That Section 5.05.135, Salt Lake City Code,pertaining to fees related certificates of public convenience and necessity be, and the same hereby is, amended to read as follows: 5.05.135 Fees: No certificate shall be issued or continued in operation unless the holder thereof has paid the annual City base license fee, the annual City regulatory fees for the business, as set forth in Schedule 1 of this Title, and any fees for the business andfor each vehicle authorized under a certificate of public convenience and necessity as set forth is Section 5.04.070 of this Division, or its successor section and any other fees or charges established by proper authority and applicable to the holder or to those vehicles under the holder's operation and control. SECTION 5. That Schedule 2 of Title 5, Salt Lake City Code, pertaining to disproportionate fees for certain classes of business be, and the same hereby is, enacted to read as follows: SCHEDULE 2 The following businesses shall be charged the following disproportionate fees, in addition to the base license fee and the per employee fee, due their receiving a disproportionate level of city services, as provided in Section 5.04.070 of this Title or its successor section. Disproportionate Businesses Fee AIRLINES AND AIR TRANSPORTATION SERVICES 13 Fee per business 150.00 ALL OTHER SERVICES —AS CATEGORIZED BY THESE NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM ("NAICS") CODES 20.00 per business 3231 Printing & Related Support Activities 4541 Electronic Shopping & Mail-Order Houses 4542 Vending Machine Operators 4543 Direct Selling Establishments 4921 Couriers 5111 Newspaper/Periodical/Book/Database Publishers 5131 Radio &Television Broadcasting 5133 Telecommunications 5142 Data Processing Services 5241 Insurance Carriers 5322 Consumer Goods Rental 5412 Accounting/Tax Prep/Bookkeeping/Payroll Services 5414 Specialized Design Services 5415 Computer Systems Design Services 5416 Management, Sci &Tech Consulting Services 5419 Other Professional/Scientific/Technical Service 5611 Office Administrative Services 5612 Facilities Support Services 6117 Educational Support Services 7112 Spectator Sports 7113 Promoters Of Entertainment Events 7114 Agents/Managers For Artists &Other Public Figure 7115 Independent Artists,Writers& Performers 7139 Other Amusement & Recreation Industries 8129 Other Personal Services 31142 Fruit&Veq Canning, Pickling & Drying 32311 Printing 33271 Machine Shops 42145 Metal Service Centers & Offices 45122 Prerecorded CD/Tape/Record Reproducing 45421 Vending Machine Operators 45439 Other Direct Selling Establishments 48421 Used Household & Office Goods Moving 48849 Other Road Transportation Support Activities 51111 Newspaper Publishers 51112 Periodical Publishers 51113 Book Publishers 51224 Sound Recording Studios 51322 Cable & Other Program Distribution 51334 Satellite Telecommunications 51412 Libraries &Archives 51421 Data Processing Services 52222 Sales Financing 14 52231 Mortgage & Non-mortgage Brokers 52239 Other Credit Intermediation Activities 52311 Investment Banking &Securities Dealing 52314 Commodity Contracts Brokerage 52393 Investment Advice 52421 Insurance Agencies & Brokerages 52591 Open-End Investment Funds 52592 Trusts, Estates &Agency Accounts 53112 Lessors Of Nonresidential Bldg (Exc Mini-warehouse) 53119 Lessors Of Other Real Estate Property 53212 Truck, Utility Trailer& RV Rental & Leasing 53223 Video Tape & Disk Rental 53249 Other Commercial/Industrial Equip Rental/Lease 54121 Accounting/Tax Prep/Bookkeeping/Payroll Services 54131 Architectural Services 54132 Landscape Architectural Services 54135 Building Inspection Services 54137 Surveying/Mapping (Exc Geophysical) Services 54143 Graphic Design Services 54149 Other Specialized Design Services 54151 Computer Systems Design & Related Services 54161 Management Consulting Services 54162 Environmental Consulting Services 54169 Other Scientific &Technical Consulting Services 54171 R&D In Physical, Engineering & Life Sciences 54172 R&D In Social Sciences& Humanities 54181 Advertising Agencies 54182 Public Relations Agencies 54184 Media Representatives 54186 Direct Mail Advertising 54191 Marketing Research & Public Opinion Polling 54192 Photographic Services 54193 Translation & Interpretation Services 54194 Veterinary Services 56111 Office Administrative Services 56131 Employment Placement Agencies 56132 Temporary Help Services 56133 Employee Leasing Services 56142 Telephone Call Centers 56144 Collection Agencies 56145 Credit Bureaus 56151 Travel Agencies 56152 Tour Operators 56159 Other Travel Arrangement & Reservation Services 56162 Security Systems Services 56171 Exterminating & Pest Control Services 56173 Landscaping Services 56174 Carpet& Upholstery Cleaning Services 56179 Other Services To Buildings &Dwellings 15 56192 Convention &Trade Show Organizers 56199 All Other Support Services 61161 Fine Arts Schools 61162 Sports & Recreation Instruction 62141 Family Planning Centers 62411 Child &Youth Services 62419 Other Individual & Family Services 71113 Musical Groups &Artists 71131 Promoters Of Entertainment Events W/Facility 71132 Promoters Of Entertainment Events W/O Facility 71141 Agents/Managers For Artists & Other Public Figures 71151 Independent Artists,Writers & Performers 71394 Fitness & Recreational Sports Centers 71395 Bowling Centers 71399 All Other Amusement& Recreation Industries 72232 Caterers 72233 Mobile Food Services 81142 Reupholster& Furniture Repair 81211 Hair, Nail &Skin Care Services 81219 Other Personal Care Services 81221 Funeral Homes 81222 Cemeteries &Crematories 81231 Coin-Operated Laundries & Drycleaners 81291 Pet Care (Except Veterinary) Services 81292 Photofinishing 81293 Parking Lots &Garages 81299 All Other Personal Services 81391 Business Associations 92216 Fire Protection 92412 Administration Of Conservation Programs 92615 Reg/License/Inspect - Misc Commercial Sectors 115115 Farm Labor Contractors &Crew Leaders 233110 Land Subdividers And Developers (Except Cemeteries) 323113 Commercial Screen Printing 323116 Manifold Business Form Printing 326212 Tire Retreading 511199 All Other Publishers 512191 Teleproduction & Other Postproduction Services 513322 Cellular&Other Wireless Telecommunications 513390 Communication Services 514191 On-Line Information Services 522291 Consumer Lending 523210 Securities Exchanges 523999 Miscellaneous Financial Investment Activities 524292 Insurance & Pension Funds, Third Party Admin 524298 All Other Insurance Related Activities 531311 Residential Property Managers 531312 Nonresidential Property Managers 532292 Recreational Goods Rental 16 541191 Title Abstract &Settlement Offices 541211 Offices Of Certified Public Accountants 541213 Tax Preparation Services 541214 Payroll Services 541219 Other Accounting Services 541380 Assaying Services 541511 Custom Computer Programming Services 541513 Computer Facilities Management Services 541519 Other Computer Related Services 541612 Human Res & Exec Search Consulting Services 541613 Marketing Consulting Services 541614 Process, Phys Dist & Log Consulting Services 541618 Other Management Consulting Services 541921 Photography Studios, Portrait 541922 Commercial Photography 541940 Veterinary Services 551112 Offices Of Other Holding Companies 551114 Corp, Subsidiary& Regional Managing Offices 561439 Other Business Service Centers (Ind Copy Shops) 561492 Court Reporting &Stenotype Services 561499 All Other Business Support Services 561510 Travel Agencies 561611 Investigation Services 561612 Security Guards & Patrol Services 561621 Security Systems Services, (Except Locksmiths) 561730 Landscape& Horticultural Services 562111 Solid Waste Collection 611512 Flight Training 611691 Exam Preparation &Tutoring 621511 Medical Laboratories 711211 Sports Teams And Clubs 811192 Carwashes 812111 Barber Shops 812112 Beauty Salons 812113 Nail Salons 812199 Other Personal Care Services 812921 Photofinishing Laboratories (Except One-Hour) AMUSEMENT DEVICES AND/OR BILLIARDS Fee per business 20.00 AUTOMOBILE DEALERS Fee per business 45.00 17 AUTOMOBILE PARTS SALES Fee per business 85.00 AUTOMOBILE RENTAL AGENCY Fee per business 20.00 AUTOMOBILE REPAIR Fee per business 45.00 AUTOMOBILE TOWING AND WRECKING Fee per business placed on police rotation 15.00 Fee per business not placed on police rotation 15.00 BANKS Fee per business 100.00 CHILD CARE FACILITIES Fee per business 100.00 CLOTHING SALES—AS CATEGORIZED BY THESE NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM ("NAICS") CODES 75.00 per business 4223 Apparel, Piece Goods & Notions Whsle 44813 Children's & Infants' Clothing Stores 44815 Clothing Accessories Stores 4481 Clothing Stores 4521 Department Stores 45211 Department Stores 452110 Department Stores 44814 Family Clothing Stores 81143 Footwear & Leather Goods Repair 44811 Men's Clothing Stores 44819 Other Clothing Stores 4482 Shoe Stores 44821 Shoe Stores 448150 Women's Accessory Stores 44812 Women's Clothing Stores 315212 Women's/Girls'/Infants' Cut/Sew Apparel Contr 18 CONSTRUCTION Fee per business 20.00 CONVALESCENT OR RETIREMENT HOME Fee per business 120.00 DANCE HALL Fee per business (renewal only) 15.00 DRY CLEANING AND LAUNDRY Fee per business 100.00 ELECTRONIC GOODS SALES Fee per business 120.00 ENGINEERING Fee per business 20.00 FURNITURE SALES Fee per business 45.00 GASOLINE STATIONS Fee per business 120.00 GROCERY AND CONVENT 1,NCE STORES —AS CATEGORIZED BY THESE NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM ("NAICS") CODES 100.00 per business 445299 All Other Specialty Food Stores 44512 Convenience Stores 4224 Grocery& Related Product Whsle 44511 Grocery(Except Convenience) Stores 4451 Grocery Stores 19 GROUND TRANSPORTATION —AS CATEGORIZED BY THESE NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM ("NAICS") CODES 100.00 per business 485999 All Other Transit & Ground Passenger Trans 485113 Bus & Other Motor Vehicle Transit System 4859 Other Transit& Ground Passenger Transportation 48599 Other Transit&Ground Passenger Transportation HARDWARE SALES —AS CATEGORIZED BY THESE NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM ("NAICS") CODES 100.00 per business 44413 Hardware Stores 42171 Hardware Whsle 4217 Hardware, & Plumb & Heating Equip & Sup Whsle 44411 Home Centers 4213 Lumber& Other Construction Materials Whsle 42131 Lumber, Plywood, Millwork&Wood Panel Whsle 42139 Other Construction Material Whsle HEALTHCARE FACILITIES AND HOSPITALS —AS CATEGORIZED BY THESE NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM ("NAICS") CODES 35.00 per business 62139 All Other Health Practitioners' Offices 621999 All Other Misc Ambulatory Health Care Services 62199 All Other Ambulatory Health Care Services 6221 General Medical &Surgical Hospitals 62211 General Medical & Surgical Hospitals 62131 Offices Of Chiropractors 6212 Offices Of Dentists 62121 Offices Of Dentists 62132 Offices Of Optometrists 6213 Offices Of Other Health Practitioners 62133 Offices Of Other Mental Health Practitioners 6211 Offices Of Physicians 62111 Offices Of Physicians 621111 Offices Of Physicians (Exc Mental Health) 20 621112 Offices Of Physicians, Mental Health 621391 Offices Of Podiatrists 62134 Offices Of Pt/Ot/Speech Therapy&Audiology INTERIOR DESIGN Fee per business 20.00 JANITORIAL BUSINESS Fee per business 55.00 LAWYER Fee per business 15.00 LIMOUSINE COMPANIES Fee per business 15.00 LIVE ENTERTAINMENT/CONCERTS Fee per business (renewal only) 15.00 MANUFACTURING BUSINESS Fee per business 35.00 PRE-ARRANGED GROUND TRANSPORTATION PROVIDERS Fee per business 100.00 REAL ESTATE BUSINESS Fee per business 15.00 RESTAURANTS AND CAFETERIAS Fee per business 75.00 RETAIL/WHOLESALE SALES —AS CATEGORIZED BY THESE NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM ("NAICS") CODES 35.00 per business 21 45299 All Other General Merchandise Stores 453998 All Other Misc Store Retailers (Exc Tobacco). 445299 All Other Specialty Food Stores 45392 Art Dealers 445291 Baked Goods Stores 42281 Beer&Ale Whsle 441222 Boat Dealers 451211 Book Stores 45121 Book Stores & News Dealers 4512 Book, Periodical & Music Stores 42292 Book, Periodical & Newspaper Whsle 44313 Camera & Photographic Supplies Stores 4226 Chemical &Allied Products Whsle 42152 Coal &Other Mineral & Ore Whsle 8113 Commercial Equipment(Exc Auto & Elec) R&M 81131 Commercial Equipment (Exc Auto & Elec) R&M 811212 Computer& Office Machine R&M 42143 Computer& Peripheral Equip &Software Whsle 3341 Computer& Peripheral Equipment Mfg 33411 Computer& Peripheral Equipment Mfg 445292 Confectionery& Nut Stores 44612 Cosmetics, Beauty Supplies & Perfume Stores 4222 Drugs & Druggists'Sundries Whsle 42221 Drugs & Druggists' Sundries Whsle 4541 Electronic Shopping & Mail-Order Houses 45411 Electronic Shopping & Mail-Order Houses 4225 Farm Product Raw Material Whsle 44221 Floor Covering Stores 4531 Florists 45311 Florists 81143 Footwear& Leather Goods Repair 44523 Fruit&Vegetable Markets 448190 Furriers & Fur Apparel Stores 42241 General Line Grocery Whsle 45322 Gift, Novelty&Souvenir Stores 1114 Greenhouse, Nursery& Floriculture Production 4224 Grocery& Related Product Whsle 4461 Health & Personal Care Stores 454311 Heating Oil Dealers 45112 Hobby,Toy& Game Stores 42122 Home Furnishing Whsle 42183 Industrial Machinery& Equipment Whsle 42184 Industrial Supplies Whsle 42184 Jewelry Stores 42194 Jewelry/Watch/Precious Stone & Metal Whsle 4442 Lawn & Garden Equip &Supplies Stores 44832 Luggage & Leather Goods Stores 4218 Machinery, Equipment&Supplies Whsle 45393 Manufactured (Mobile) Home Dealers 22 42247 Meat& Meat Product Whsle 44521 Meat Markets 42145 Medical/Dental/Hospital Equip &Supp Whsle 4215 Metal & Mineral (Except Petroleum) Whsle 4219 Miscellaneous Durable Goods Whsle 4229 Miscellaneous Nondurable Goods Whsle 45114 Musical Instrument&Supplies Stores 44422 Nursery&Garden Centers 42142 Office Equipment Whsle 45321 Office Supplies &Stationery Stores 42146 Ophthalmic Goods Whsle 44613 Optical Goods Stores 42149 Other Professional Equipment&Supplies Whsle 811118 Other Automotive Mechanical & Electrical R&M 44419 Other Building Material Dealers 42269 Other Chemical &Allied Products Whsle 42259 Other Farm Product Raw Material Whsle 4529 Other General Merchandise Stores 44619 Other Health & Personal Care Stores 42199 Other Miscellaneous Durable Goods Whsle 42299 Other Miscellaneous Nondurable Goods Whsle 4539 Other Miscellaneous Store Retailers 81149 Other Personal & Household Goods R&M 44529 Other Specialty Food Stores 44412 Paint&Wallpaper Stores 42295 Paint,Varnish &Supplies Whsle 4221 Paper& Paper Product Whsle 45391 Pet& Pet Supplies Stores 42141 Photographic Equipment&Supplies Whsle 42231 Piece Goods, Notions &Other Dry Goods Whsle 334612 Prerecorded Tape, CD & Record Stores 443112 Radio,Television & Other Electronics Stores 42193 Recyclable Material Whsle 42133 Roofing, Siding & Insulation Material Whsle 42185 Service Establishment Equip&Supplies Whsle 45113 Sewing, Needlework& Piece Goods Stores 722213 Snack& Nonalcoholic Beverage Bars 42212 Stationery& Office Supplies Whsle 22133 Steam &Air-Conditioning Supply 42113 Tire &Tube Whsle 44132 Tire Dealers 42192 Toy& Hobby Goods &Supplies Whsle RV PARKS AND CAMPGROUNDS Fee per business 20.00 23 SHIPPING COMPANIES —AS CATEGORIZED BY THESE NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM ("NAICS") CODES 35.00 per business 4885 Freight Transportation Arrangement 48851 Freight Transportation Arrangement 4841 General Freight Trucking 48411 General Freight Trucking, Local 48412 General Freight Trucking, Long-Distance 484122 General Freight Trucking, Lonq-Distance, Ltl 484121 General Freight Trucking, Long-Distance,TI SPORTING GOODS SALES —AS CATEGORIZED BY THESE NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM ("NAICS") CODES 35.00 per business 42191 Sporting & Recreational Goods &Supply Whsle 45111 Sporting Goods Stores 4511 Sporting Goods/Hobby/Musical Instrument Stores STORAGE SERVICES —AS CATEGORIZED BY THESE NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM ("NAICS") CODES 45.00 per business 49311 General Warehousing &Storage 4931 Warehousing &Storage TAXICAB COMPANIES Fee per business 15.00 THEATER/MOTION PICTURE Fee per business (renewal only) 75.00 TOBACCO SALES Fee per business 85.00 24 VARIOUS BUSINESS SERVICES —AS CATEGORIZED BY THESE NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM ("NAICS") CODES 20.00 per business 541611 Admin &Gen Management Consulting Services 561499 All Other Business Support Services 5614 Business Support Services 56141 Document Preparation Services 492210 Miscellaneous Business Service/Messenger Service 561439 Other Business Service Centers(Ind Copy Shops) 56149 Other Business Support Services 541618 Other Management Consulting Services 61143 Professional/Management Development Training WHOLESALE GAS AND OIL Fee per business 20.00 501(C)(3)-TYPE ORGANI7ATION Fee per business 200.00 SECTION 6. This ordinance shall take effect immediately upon the date of its first publication. Passed by the City Council of Salt Lake City, Utah this day of 2006. CHAIRPERSON ATTEST: CHIEF DEPUTY CITY RECORDER Transmitted to Mayor on 25 Mayor's Action: Approved. Vetoed. MAYOR ATTEST: CHIEF DEPUTY CITY RECORDER (SEAL) Bill No. of 2006. Published: I:AOrdinance 06\Amending Schedule 1 of Title 5 Business License Fees--05-23-06 draft.doc 26 INSURANCE AND RISK MANAGEMENT New numbers from the Administration -submitted 5/24/06 Revenue&other sources Premiums 29,272,575.00 30,782,585.00 1,510,010.00 5.16% Reimbursements(subrogation) 20,000.00 20,000.00 0.00 Interest 20,000.00 54,276.00 34,276.00 171.38% Bus pass transfer from other funds 102,024.00 105,708.00 3,684.00 3.61% Rental Income 18,000.00 18,000.00 Total revenue&other sources 29,414,599.00 30,980,569.00 1,565,970.00 5.32% ............................................ Expenses . Health insurance costs 22,091,480.00 23,163,680.00 1,072,200.00 4.85% Insurance Increase 791,400.00 3.58% New Hire Increase 30 employees 280,800.00 1.27% Dental insurance costs 1,765,008 00 1865,608.00 100,600.00 5.70% Insurance Increase 70,600.00 4.00% New Hire Increase 30 employees 30,000.00 1.70% Life/accidental death costs 1,131,968.00 1065,000.00 -66,968.00 -5.92% Long-term disability 605,608.00 612,216.00 6,608.00 1.09% Workers compensation 1,693,816.00 1835,266,00 141,450.00 8.35% Unemployment compensation 206,400.00 237,900.00 31,500.00 15.26% Property insurance/surety bonds 987,548.00 1313,641.00 326,093.00 33.02% Bus passes 102,024.00 105,708 00 3,684.00 3.61% Loss Control/Safety Program 20,000.00 21,000.00 Administration—Mgt Services 614,707.00 562,694.00 -52,013.00 -8.46% Administration—Attorney 196,040 00 z 198,856.00 2,816.00 1.44% Total Expenses 29,414,599.00 30,980,569.00 1,565,970.00 5.32% 1,, , SALT LAKE CITY COUNCIL STAFF REPORT BUDGET ANALYSIS—FISCAL YEAR 2006-07 DATE: May 23, 2006 SUBJECT: INSURANCE AND RISK MANAGEMENT FUND STAFF REPORT BY: Sylvia Jones CC: Rocky Fluhart, Sam Guevara, Ed Rutan, Lynn Pace, Tim Rodriguez, Jamey Knighton, Jodi Langford, Steve Fawcett, Gordon Hoskins, and Kay Christensen The budget for the Insurance and Risk Management Fund accounts for costs associated with employee health insurance, dental insurance, disability insurance, life insurance, unemployment compensation, property and casualty insurance, and workers compensation. The Human Resource Division of the Department of Management Services oversees employee participation in health, dental, life, accidental death & dismemberment, and disability insurance programs. The City Attorney's Office coordinates with a contract third-party administrator on workers' compensation claims; places and monitors property insurance; performs risk assessments; handles third-party subrogation claims, and coordinates citywide safety activities. INSURANCE AND RISK MANAGEMENT FUND PROPOSED BUDGET Adopted Proposed Difference Percent 2005-06 2006-07 Change Revenue&other sources Premiums $29,272,575 $31,719,493 $2,426,918 8.4%* Reimbursements(subrogation) 20,000 20,000 Interest 20,000 54,276 34,276 171.4% Bus pass transfer from other funds 102,024 105,160 3,136 3.1% Rental Income 18,000 18,000 Total revenue&other sources $29,414,599 31,897,477 2,482,878 8.5% Expenses Health insurance costs $22,091,480 $24,061,416 $1,969,936 8.9% Dental insurance costs 1,765,008 1,884,780 119,772 6.8% Life/accidental death costs 1,131,968 1,065,000 (66,968) (5.9%) Long-term disability 605,608 612,216 6,608 1.1% Workers compensation 1,693,816 1,835,266 141,450 8.4% Unemployment compensation 206,400 237,900 31,500 15.3 Property insurance/surety bonds 987,548 1,313,641 326,093 33.0% Bus passes 102,024 105,708 3,684 3.6% Loss Control/Safety Program 20,000 20,000 Administration—Mgt Services 614,707 562,694 (52,013) (8.5%) Administration—Attorney 196,040 198,856 2,816 1.4% Total Expenses $29,414,599 31,897,477 2,482,878 8.4% General liability claims are not paid from the Insurance & Risk Management Fund. The City's general liability claims are budgeted and paid from a separate Governmental Immunity Fund. POTENTIAL MATTERS AT ISSUE • Health Insurance - major change in premium structure -The City is self-insured for employee health coverage. The City's health insurance costs have increased an average of 8.1% per year over the past eleven years (less than the national average). In order to reduce this cost trend, the Administration is proposing some major changes to the City's health insurance program. The Administration's health insurance proposal continues to allow employees the option of three health insurance plans. Currently, the City pays 100% of the employee's premium in any of the three plans. One plan, Summit Care, costs the City 20% to 30% less than the other plans due to higher discounts that have been negotiated with providers and facilities. Under the new premium structure, the Administration is proposing to pay 100% of each employee's premium in the Summit Care plan and require employees to pay the additional cost if they select one of the more expensive plans. This will help control future claims costs and premium increases. The Administration also proposes to implement a $150 annual deductible. (The employee clinic use and prescriptions are not subject to this deductible.) Those enrolled in Summit Care will have the option to use any medical provider, but if an out-of network provider is used, the plan pays 70% of the Summit Care schedule of benefits and a $250 deductible applies in addition to the standard co-pay. This out-of-network option is new to the Summit Care plan, and seems to be key to the City's justification for providing payment for this program only, rather than allowing for all three options. In order to encourage movement from the higher cost plans to the more cost effective plan, the Administration is proposing to pay 100% of the cost to add spouse/double coverage or family/more-than-two coverage in the Summit Care plan. Employees can pay the additional cost for one of the more expensive plans. These changes were recommended by a majority vote of the City's Benefits Committee. The Human Resource Management Division briefed union membership and the professional employees' council. According to the Administration, the changes received support from a majority of those attending these briefings. Additional meetings are scheduled for all employees during the month of May. Under past practice, the specific implementation of benefits is largely an administrative matter, while the funding is legislative. *The Council may wish to note that the Mayor's budget was prepared prior to the proposed policy changes to the medical insurance program. According to the Administration, an adjustment needs to be made to reflect that the insurance premiums are increasing by 4.0% as opposed to the 8.4%figure listed on page one of this staff report. This information was not available from the Administration at the time this report was written. The Administration said they would be getting back to Council staff on this issue. • Dental insurance (increase of 6.8%) - The increase in dental insurance can be attributed to a 4.0% increase in premium costs, as well as an increase in the 2 number of employees and their dependants participating in the dental plan. The cost of this optional insurance is entirely the responsibility of employees desiring dental coverage. • Life & accidental death insurance - There is a 5.9% decrease to the cost of life insurance due to actual costs being less than the prior year budget. The City provides employees with basic life insurance ($50,000) at no cost to employees. Additional optional life insurance (self, spouse or family coverage) is available to an employee with the entire premium being paid by the employee. There will be no change to the accidental death and disability insurance. The City's portion and the additional optional life are available to employees. • Long-term disability premiums - By state law the City must provide long-term disability coverage for police officers. Other City employees have the option of obtaining long-term disability insurance by paying the full amount of the premium. The City is self insured for this coverage, which is administered by a third party. • Rental Income Revenue - The Insurance and Risk Fund is budgeted to receive $18,000 of rental income from the old vacant building where the PEHP clinic used to be housed. The City leases out the front of the clinic and receives this rental income. The Council may wish to clarify whether it is typical for building rental funds to be allocated to this fund, or whether those funds should be allocated to a fund related to city property. • Workers compensation - The cost of workers compensation medical payments has increased by 8.4%, which, according to the Administration, is a result of an increase in the City's self-insurance fee of nearly $100,000. The State charges a fee for the privilege of handling workers compensation claims outside of the Workers Compensation Fund of Utah. • Unemployment compensation (increase of 15.3%) The budget proposes $237,900 for unemployment compensation, which is an increase of 15.3%. The proposed budget is based on actual usage. Actual costs for fiscal year 2004-05 were $135,203, and actual costs for the first ten months of fiscal year 2005-06 were $162,405. The Council may wish to ask the Administration to account for the projected increase in unemployment compensation, and whether unemployment compensation is available to part-time/seasonal employees as well as full-time employees. Further, the Council may wish to ask whether any of this projected increase is a result of the proposed changes to the golf program, and whether the costs will be covered by that fund. • Property Insurance (increase of 33.0%1 - The City carries a $100,000 per loss deductible. A major portion of property insurance relates to the Airport and is reimbursed by the Department of Airports. According to the Administration, this year's increase can be attributed to an increase in the City's property insurance premiums of 7.0% due to Hurricane Katrina, as well as the fact that last year's actual costs exceeded what was budgeted. • Loss control/safety program - Funding for the loss prevention program is from money collected from third party insurance companies relating to prior year General Fund claims. When employees are injured or City property is damaged 3 due to third party negligence, the City departments pay for repairs, medical expenses and salaries while injured employees are recovering. The Attorney's Office collects from third parties and their insurance companies (subrogation reimbursements) and then reimburses the departments. Subrogation payments collected in the same fiscal year are reimbursed to the departments. Subrogation relating to enterprise funds is also reimbursed to the enterprise funds. However, subrogation relating to a prior-year General Fund claim is retained to support the program because budgets are closed out each year in the General Fund. This approach has been taken to fund the loss prevention program since 1999. Actual subrogation revenue for fiscal year 2004-05 was $106,386, and actual subrogation revenue for the first ten months of fiscal year 2005-06 was $65,281. It seems that the Administration estimates low for subrogation reimbursements. The Council may wish to ask if there are any accumulated funds available for other one-time use. • Bus pass program- The bus pass program is funded by the general fund through a transfer from the Nondepartmental budget and by transfers from each enterprise and internal service fund. This budget is included in the Insurance & Risk Management Fund because bus passes are a benefit for employees. The proposed charge to the general fund is $62,130 and the proposed charge to enterprise funds is $43,578. • Administration - Administration costs in the Attorney's Office are proposed to increase by 1.4%. Projected costs for Management Services administration are decreasing by 8.5%. Actual usage has decreased as compared to what was budgeted. These costs include services such as accounting, payroll, purchasing, human resource management, etc. • Interest Income -The budget estimates $54,276 for interest income. For the first ten months of fiscal year 2005-06, the Insurance & Risk Management Fund received $141,000 of interest. Therefore, the forecasted revenue budget appears to be low. The Council may wish to ask whether the Administration would like to reconsider the forecast for interest income. LEGISLATIVE INTENT STATEMENT No legislative intent statements are outstanding relating to the Insurance & Risk Management Fund. During the briefing on the proposed budget, the Council may wish to identify legislative intents relating to thefnsurance & Risk Management Fund During the briefing, the Council may wish to identify potential programs or functions to be added to the Council's list for future audits. 4 SALT LAKE CITY COUNCIL MAYOR'S RECOMMENDED BUDGET FISCAL YEAR 2006-07 DATE: May 25, 2006 SUBJECT: Unresolved issues - Mayor's Recommended Budget FY 06-07 STAFF REPORT BY: Gary Mumford cc: Sam Guevara, Rocky Fluhart, Ed Rutan, Rick Graham, Louis Zunguze, Chief Chuck Querry, Chief Chris Burbank, Steve Fawcett, Kay Christensen, Susi Kontgis, DJ Baxter The Council received the Mayor's Recommended Budget on May 2, 2006 and held budget briefings with the City's departments. The Council may wish to discuss some of the following unresolved issues. Additional Council discussions of unresolved budget issues are tentatively scheduled beginning June 1. The Council may wish to defer discussions on some of the items until one of the later work sessions when more information should be available. The following items are in alphabetical order. This is not a complete list of every item that Council staff is following up on. There are additional issues that will be addressed. We have starred the items that will require follow-up information, and placed in bold those for which it appears we have all of the basic information. Unresolved budget issues: 1. Animal services ($100,000 increase) - Salt Lake County has been providing animal control services for Salt Lake City for several years by contract. The latest contract with the County Animal Services is a five year contract fixed for the first two years and variable afterwards. We are currently in the third year of the contract. The Salt Lake County Sherriff's Office, which handles the dispatching of animal service calls, will begin charging the County's Animal Services Division for this service. Salt Lake City's portion for fiscal year 2006-07 will be $92,546. This item is included in the staff report for the Nondepartmental budget. 2. Business license fees ($1,323,379 increase) - **The Council is scheduled to receive a separate briefing on the proposed business license fees. 3. Carpet in One-Stop Shop-The Council may wish to revisit the City 8s County Building re-carpeting project. It is listed in the 10-Year CIP Plan for FY 2007 but was inadvertently not requested this year because of staff turnover in the Facilities Management Division. However, due to the possible reconfiguration of space for the proposed one-stop r!' counter, it could make financial sense to do at least one quadrant of carpet for the building in the same year as this proposal, so as not to duplicate efforts. To receive the best price, the Administration proposes buying carpet in a 1,500 yard lot for a total cost of$116,925. The one stop shop needs only 215,218 square feet for their project at a cost of$41,000. The remaining carpet will be stored or used to re- carpet a second quadrant of office space on the same floor. 4. Cemetery fee increase - Last year the Council adopted a two year phased approach to increasing cemetery fees. The increase set to take effect July 1, 2006 is expected to bring in $11,700 in additional .•evenue. The Council has the option to amend the fee schedule. Perhaps, the fees could be increased beyond the current ordinance since burial plots at the City cemetery may be sold out within a short time. The Council may wish to determine whether a majority support the new cemetery fee schedule? 5. Enhanced level of special events ($168,000 new funding) -The Administration is requesting additional funding of$110,000 within the Department of Public Services and $58,000 in the Police Department because the costs of supporting special events continues to increase. In the past, the Council issued a legislative intent requesting that the Administration determine where it would be appropriate to charge reimbursement fees. The Administration provided the following information about costs and amounts reimbursed. The top of the table shows citywide costs while the bottom portion is specifically for the Department of Public Services. The Council may wish to request clarification and specific information on the way in which the funding would be applied-whether it would reduce the current subsidy and allow the department to avoid diverting resources from other functions in order to address basic special event needs or whether it would serve some other purpose. Special Events Costs/Revenue - All City Departments Total Cost to the City for Supporting Special Events $ 490,908 less-Reimbursed costs $ (28,238) less-Concession agreements $ (41,901) Total Subsidy-All City Departments $ 420,769 Special Events Costs/Revenue - Public Services Dept Total Costs-Public Services Dept(Streets, Parks,Refuse,Parking,Engineering, Special Event Support) $ 241,873 less-Reimbursed costs (not including concession agreements. Concession agreements do not directly go to reimburse the Public Services Department,but the City as a whole) $ (28,238) Total Public Services Dept Subsidy $ 213,635 less Concession agreements $ (41,901) Total Public Services Dept Subsidy (including concession agreement revenue) $ 171,734 2 6. Fire Department retirement incentive ($45,000) -The budget includes an experimental one-time retirement incentive. Firefighters who have served over 30 years would be eligible for a single payment of$5,000 (,) per employee with the intent to help pay for health insurance. The Fire Department expects to generate savings of$90,000 over five years for each employee taking the incentive. The budget does not include a similar proposal for police officers. The Council may wish to ask the Administration about the status of the physical fitness requirements for City fire and police positions. 7. Fire inspection fees ($276,224 increase) - **A discussion of the proposed ordinance on fire inspection fees is included in the staff report on business license fees, which will be held separately. 8. Fire Permit Fees ($126,000 increase) -It appears that fire permit fees may have been budgeted twice in the proposed budget. The Administration was asked to provide an update regarding this issue. Council staffs understanding is that the Administration is going to recommend that the duplicate budgeted revenue be eliminated and replaced with $126,000 of additional interest revenue. Interest rates have increased since the time the budget was developed. A written response has not yet been provided by the Administration. 9. Golf season passes - **Previously, the Administration had been phasing out season passes. There were concerns regarding abuse of the peak times and number of golf rounds played. The proposed season pass program is priced and restricted to help address these concerns, while at the same time encouraging the people to play Salt Lake City courses. The Council may wish discuss the pass program and indicate whether it supports this proposal. 10. Golf employees transfer to seasonal status- **The Administration is proposing a shift from some full-time golf employees to seasonal staffing in an effort to reduce costs and align staffing more closely with operations. Council staff has requested additional information. The Council may wish to defer discussion of this issue until an upcoming work session. 3 11. Grant Tower-The proposed budget includes bonding $7 million to realign the railroad tracks at the Grant Tower Curve and construct the Folsom Street/City Creek Parkway, which will daylight City Creek. This cost is in addition to the $4 million that the Council previously allocated from fund balance. The Council may wish to discuss whether to pay for a portion of the additional Grant Tower costs with fund balance. Fund Balance General Fund Fund balance -June 30, 2005 $26,631,000 Less use of last year's lapsed appropriations for one-time (887,000) costs in fiscal year 2006 Less appropriation of fund balance by budget amendment (6,632,000) Less proposed use of fund balance in budget (210,000) amendment #5 Less proposed use of fund balance in Mayor's (3,725,000) Recommended Budget for fiscal year 2007 Plus forecasted excess revenue in fiscal year 2006 3,393,000 Plus approximate expenditure savings in fiscal year 2006 400,000 Estimated Fund balance -June 30, 2006 $18,970,000 (10.1% of proposed general fund revenue of$187,210,603) Minimum amount per Council policy 18,721,000 (10% of general fund revenue) Amount in excess of Council's 10% policy $ 249,000 Note: If the on-going property tax increase of$2,090,000 is not levied, approximately $450,000 of fund balance will be in excess of 10% of general fund revenue. 12. Justice Court - By straw poll, the Council made a preliminary decision to wait on authorizing the proposed new court positions until after the Council's study is completed. The study is scheduled to be completed in six months. The budget proposes to extend the four contract positions until November 1, 2006. Since it may take additional time to receive the final audit report and to determine a course of action, the Council may wish to consider two options: 1) fund the four contract employees' salaries through December 31, 2006 at an additional cost of $22,567, or 2) fund the four contract employees' salaries through June 30, 2007 at a cost of$90,266. These contract employees could also be funded out of one-time money. 13. Legal Defenders ($148,368 increase) - The City is required to provide legal counsel for indigent defendants where jail time is a possibility. The City contracts this responsibility to Salt Lake Legal Defenders at a proposed cost of$615,162 for fiscal year 2006-07. The increase is for two attorneys and one secretary. This item is included in the staff report for the Nondepartmental budget. 4 14. Leonardo addition to the old library building-The Mayor is proposing to fund a $1,500,000 request from the Leonardo for an annex/seismic solution to the old library building. The proposed funding is to come from fund balance. The Council may wish to discuss whether a majority is in favor appropriating fund balance for the Leonardo addition. 15. Mounted Horse Patrol ($42,700 City portion) - Council Member Saxton has been looking into the possibility of the Police Department using horse-mounted police in certain city parks or areas of the city. A pilot {7 program could be partially supported with private contributions. The Council may wish to discuss the possibility of a small mounted horse unit. Mounted police provide improved visibility (ability to see and be seen) and the calming effect and novelty of horses. A few officers have personal horses and may be willing to use their horses and trailers on an overtime basis. The city would also pay for the horse's care, specialized uniforms and boots, saddle bags, and some other costs. The Council could opt to also consider this funding in the budget amendment in order to start the program as soon as possible. 16. New Community Development position - Planner ($70,000 increase) - The budget proposes one additional planner ($51,588 annual salary) to focus on downtown redevelopment and the recently adopted compatible 00" residential infill ordinance. The Administration indicates that the compatible infill ordinance requires more intense review by plan review and field inspection staff. It should be noted that last year a planner position was moved from the Planning Division to the Office of the Director to address issues associated with the Northwest Quadrant Master Plan and other planning related data gathering functions. 17. New Community Development positions - One-Stop Shop ($367,124 increase) -The Administration is requesting four additional FTEs for the one-stop shop: project coordinator and plans examiner ($47,736 salary); office facilitator ($36,108 salary); technical development engineer for fire inspection plan review ($65,664 salary); and building inspector ($50,244 salary). The Council may wish to fund the fire plan review at a lower level than fire engineer, since this level of expertise isn't legally required. The engineer level position would be an increase in service level. 18. New Management Services position - Deputy Treasurer ($75,000 increase for 10-months) -The Administration is requesting a deputy treasurer position ($69,000 annual salary) to provide support to the City Treasurer with debt issuance, investment portfolio management, and certain administrative matters. 19. New Management Services position - HR Records System Administrator ($52,500 increase for 10-months) -The Administration proposes to upgrade the Human Resource Division's records management system with some savings in the current fiscal year. A new position is requested ($45,158 annual salary) to implement the system and assure compliance. 5 20. New police positions - eight police officers & sergeant ($610,000 increase, plus $225,000 for vehicles and $80,000 for personal equipment) - The salary for each new officers is $32,856 and $60,912 for the sergeant. Four of the officers would be assigned to the patrol division: two in the Pioneer Precinct and two in the Liberty Precinct. Four officers would be assigned to the detective division. The sergeant would be assigned at the Pioneer Precinct of the patrol division. 21. New police positions - two crime lab technicians ($105,000 increase) - Two additional field crime lab technicians are proposed at a salary of $30,300 each. The number of calls for service in which a crime lab technician needs to respond is increasing. Overtime expenses for crime lab technicians was $43,600 in fiscal year 2004-05 and for the first 10 months of 2005-06 has been $36,300. The Police Department explained that additional crime lab field technicians will allow officers to be back on patrol sooner. 22. New police position - civilian evidence room supervisor ($49,000 increase) - Salary of$36,756 to allow officer to be transferred to direct police services (detective division). 23. New police position - civilian technician over pawn shop review ($39,000 increase) - Salary of$28,200 to allow officer to be transferred to direct police services (detective division) 24. New Prosecutor's Office positions ($106,820 increase) -The budget proposes one new prosecutor position ($47,640 annual salary) and one additional office technician ($29,280 annual salary). 25. New Public Services position - open space coordinator ($90,000 increase) - The Administration is proposing a full-time position with an annual salary of$71,328 to work with the community in preparing open space applications, oversee the process involved with acquiring and managing open space and serve as liaison to the Open Space Advisory Board. The Council may wish to discuss whether this position needs to be full time or whether the position can be funded from one-time revenue. 26. New Public Services position - facilities energy efficiency coordinator ($68,888 increase) -This position ($51,216 salary) will assure that the City is making the most efficient use of energy in all facilities managed by the Department of Public Services. The Department decreased its budget in a like amount for energy costs in anticipation of savings that this position may bring to the City. Some of the energy saving modifications that could be recommended will likely require one-time funding before a savings can be achieved. 27. New Public Services position - engineering office tech ($50,000 increase) -This proposed position ($34,164 salary) will maintain the telecommunications cable infrastructure inventory records relating to the City's right-of-way lease revenue. This work is currently performed by a contract employee temporarily funded from some one-time savings. 6 28. New Public Services positions -Unity Center program coordinators ($30,536 increase) -Two employees positions are proposed ($41,820 annual salary) to be added when the Unit Center is opened (estimated April 1). The Council may wish to discuss the possibility of beginning with one coordinator. 29. Ongoing CIP Funding-The 10-year CIP plan requires average funding from the general fund of 7.95% of general fund revenue. The 10-year plan projected that this percentage would provide funding of $13,433,750 in fiscal year 2006-07. The proposed budget includes a transfer of$12,502,682 of on-going general fund money to the CIP fund, which is $931,068 short of the 10-year plan. The Council may wish to discuss supplementing the on-going CIP funding by making reductions in general fund positions/services. The Council could also decide to supplement the CIP funding with fund balance. The council may wish to wait until an upcoming work session for additional discussion after a number of budget cuts have been identified. 30. Property tax revenue - **The Administration proposed two on-going property tax increases: (1) $940,000 general property increase, and (2) \ $1,150,000 dedicated for payment of liability claims as allowed by state law. By straw poll on May 11, the Council was generally not in favor of the property tax increases. These two tax increases will raise the tax on a $190,000 home by $17 and $167 on a $1,000,000 business. The Council may wish to confirm whether a majority still desires to balance the budget with reductions to positions/services rather than a property tax increase. The council may wish to defer this discussion until after a number of budget cuts have been preliminary determined. 31. Property tax judgment levy- **A judgment levy in the amount of $1,304,779 is proposed to offset a shortfall stemming from Tax Commission or court decisions that reduced the current year's taxes. The property tax numbers are not yet available from the County. The Administration is assuming that this will be the number from the County since the Administration received notice of judgments from the State Tax Commission. The Administration plans to use the judgment levy for one-time expenses. This will result in a one-time tax of$11 on a home valued at $190,000 and $104 on a$1,000,000 business. The Council made an informal decision to defer the one-time court setup costs of$ 54,500. Other one-time expenses are $204,316 for Community Development, $758,950 for Fire, $242,000 for Police, and $211,000 for Public Services. By straw poll on May 11, the Council decided not to assess a judgment levy. **The Council may wish to discuss whether it is willing to do a judgment levy for general obligation debt service or for the Library. 32. Public Services positions transferred from grant funding-YouthCity program coordinators ($150,000 increase) - Grant funding for three program coordinators ($40,224 salary each) is due to expire in fiscal year 2007-08. The three site coordinators manage programming at Ottinger Hall, Fairmont Park and Liberty Park. The Council may wish to discuss deferring the shift of funding since the grant funding doesn't expire in fiscal year 2006-07. 7 33. Public Services position transferred from grant funding- computer clubhouse coordinators ($75,224 increase) - Grant funding for the computer clubhouse coordinator ($33,700 salary) and the assistant coordinator ($20,784 three-quarter time pay) will apparently expire shortly. 34. Retirement payout ($350,000) -When a City employee retires, the City makes a cash payment of accumulated vacation leave and, under an old sick leave plan, the City also pays a portion of accumulated sick leave. For the past several years, the City has budgeted $650,000 of general fund monies annually in anticipation of employees retiring. This appropriation is primarily used for police officers and fire fighters. Other departments leave positions vacant for a period to fund the payouts. The Administration is proposing to increase the retirement payout appropriation to $1,000,000. This appropriation will be available to all general fund departments rather than primarily for Police and Fire. Any amount unspent will be transferred to a separate account to accumulate for the expected increase in future years. This item is included in the Nondepartmental budget. 35. Revenue analysis - **Council staff is in the process of analyzing forecasted revenue. The Council will receive an update at an upcoming work session. 36. Sister cities ($5,000 increase) -This increase will allow the City to more appropriately reciprocate in ceremonial gift giving during visits with international delegations. This item is included in the staff report for the Nondepartmental budget. 37. Take-home vehicles - **The Administration is proposing updating the reimbursement fees for take-home vehicles because costs have increased significantly since the current fees were set in 2001. Several changes to the policy are being proposed. The Council is scheduled to receive a separate briefing on the changes to the take-home vehicle policy. 8 SAT 1% r A' air ORPORA 'IOI RICHARD GRAHAM ROSS C. "ROCKY" ANDERSON PUBLIC SERVICES DIRECTOR DEPARTMENT OF PUBLIC SERVICES MAYOR MEMORANDUM TO: David Buhler, Chair Salt Lake City Council FROM: Rick Graham, Director Public Services Department DATE: May 25, 2006 RE: Follow-up to City Council Meeting on May 11, 2006— Youth and Family Program During the briefing on the Youth and Family Program the City Council asked for responses to the following questions: 1. Is the request for$150,000 in general funds a"Policy Shift" on the part of the Administration? It was the intent of the Administration to seek"seed money" from the City Council in order to initiate YouthCity Programs. In the first year of the Administration, 2001-2002, the Administration asked the Council for funding in the amount of$300,000. The Council appropriated $150,000 and told the Administration to raise a $150,000 match, dollar for dollar. The match was accomplished, and since that time the Council has continued to appropriate $150,000 on an annual basis. This is not a policy shift. Additional funds are now being sought to create a sustainable program structure. Matching funds will continue to be sought. The YouthCity Program has expanded from one program site, Central City Recreation Center, to four sites. The $150,000 additional appropriation for FY 2006/2007 will sustain the program structure for these programs sites and ensure the program's future. 2. What Youth and Family programs are funded by the EDGAR grant or other grants/trusts, and what is the annual cost for these programs? And If the grant and trust funds were to dry up, what amount of new City funds would be needed to sustain the program funding? 451 SOUTH STATE STREET, ROOM 148, SALT LAKE CITY, UTAH B41 1 1 TELEPHONE: BO 1-535-7775 FAX: 801-535-7789 WWW.S LCG OV.COM (1i'�arr.. r o.oro The following Youth and Family programs are funded entirely by either the EDGAR, DOE grant, or other grant and trust funds: EDGAR: Liberty Park After School/ Summer Program Fairmont Park After School/ Summer Program Ottinger Hall After School/ Summer Program Other Grants/Trusts: Kennedy Center Imagination Celebration (KCIC) EDGAR: YouthCity Employment Program The EDGAR grant is a federal grant administered by the Department of Education. Other grants/trusts are typically local grants and donations made to the City to support the KCIC program. The amount of funding spent annually, and the depth of the KCIC program annually is a direct result of the amount of funds the Youth and Family Division can secure each year. The KCIC budget for any particular year is what is raised in grants and donations for the program. The YouthCity Employment Program is partially funded by the EDGAR grant, and partially funded by the General Fund. Please see the attached "Program Funding Analysis", which is a working document of our sustainability plan, that details the annual cost of the programs funded through the EDGAR grant. Liberty Park $165,621 Fairmont Park $153,899 Ottinger Hall (Memory Grove) $155,775 TOTAL $475,295 The KCIC program annual cost is $74,124. The YouthCity Employment program annual cost is $26,809 (estimated FY 2006) On an annual basis a total of$576,228 in program costs are funded by grants, donations and trusts. If the grant, donation and trust funds were to dry up and not be available to the City$576,228 would need to be found and appropriated from other sources in order to sustain the programs. 3. In response to the Council's Legislative Intent, please provide whatever portion of the programs sustainability plan that has been prepared. The Youth and Family Division staff continues to work on a formal sustainability plan for the program. Please find attached, the Clear City Team Action Plan that serves as the template for the division's sustainability plan. The funding analysis mentioned in question#2 is also a part of the sustainability plan. The Division will continue to develop the plan in the coming months with a completion date target of late fall 2006. The Council asked other questions relative to program fee schedules and computer clubhouse participation. The Department has already responded to those questions. If additional information is desired,please contact me. Rick Graham cc: Jennifer Bruno Janet Wolf 72 C a) to 0 }, , a) ✓ cJ N z o0A m a S. 4. 58A U ¢' " a O 4-4 C14 o 'er a Q.. z t 4) as l,4 0 p ..0 ,� -4, TS cd 3 a) .... 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