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Holladay council debates a business-license fee study that separates base costs from "disproportionate" public-safety fees
Summary
A consultant told the council the study separates base processing costs from disproportionate public-safety costs tied to calls-for-service; council members raised concerns about sharp fee increases to some businesses and asked staff for budget-neutral and phased implementation scenarios and regional comparables.
Council members and a consulting firm spent extended time on a proposed rewrite of the city's business-license fee schedule, focusing on a two-pillar methodology (cost analysis and process mapping) that separates a base processing fee from "disproportionate" fees intended to capture extra public-safety costs.
The consultant described the approach: measure staff time and overhead to set a base fee, then use police and fire calls-for-service data applied against business license groupings to identify categories that exceed the citywide commercial average and assign an additional disproportionate fee to those groups.
The study included sample numbers. The consultant said a typical new-business application could be priced near $300 while renewals would be about $87. Staff said current business-license revenue averages about $280,000; under a strictly reallocated base-fee approach that revenue could fall to around $120,000'$130,000, while including disproportionate fees for high-call categories could push revenue much higher (the consultant estimated scenarios that would collect substantially more, to a sample $940,000 in an illustrative maximal model).
Council members warned the transitions could shock some businesses. One member pointed to an illustrative example in which convenience-store fees rose from roughly $1,750 to $12,000 under an uncompromised disproportionate approach and called that "very shocking." Multiple members proposed caps on specific categories, revenue-neutral scenarios, and multi-year ramps so changes do not unduly harm businesses that also generate sales tax or property tax revenue for the city.
Council asked staff to return with: (1) a budget-neutral scenario that preserves roughly the city's current revenue level; (2) an aspirational scenario that captures more cost recovery while preserving competitiveness; (3) phased implementation (ramping) options; and (4) comparables from nearby municipalities (examples requested included Mill Creek, South Jordan and Riverton). Staff also recommended public engagement before adoption.
There was no final vote; the council directed staff to refine scenarios and bring back more detailed tables and regional comparisons.
