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Council adopts updated business licensing fees after cost‑of‑service study; rental‑dwelling changes continued
Summary
Following a consultant presentation and extensive questioning about inspections and staff time, Provo's council adopted new business licensing fees (base fee and measured disproportionate fees tied to police/fire impacts) and deferred rental‑dwelling licensing changes for further staff follow‑up and stakeholder input.
Provo City adopted updated business licensing fees on Dec. 16 after a statutorily required cost‑of‑service study by Zions Public Finance and staff recommendations from customer service.
Laramie Gonzalez (Customer Operations) summarized the history of the licensing program; Aaron (Zions) walked the council through a revenue sufficiency model that separates base administrative costs from measured disproportionate costs (based largely on police and fire calls per category). The study recommended moving away from employee‑count categories to a base fee per business plus category‑specific disproportionate charges where certain business types create higher demand on police or fire. The proposed base fee presented in the meeting was roughly $252 per business (staff figures in the presentation), with category adjustments based on measured call data.
Councilors pressed staff on inspection practice and the work underlying per‑unit cost calculations for rental properties; several councilors and members of the public said they believed multi‑unit inspections were not being conducted for every unit and asked for a clearer operational accounting. Because of those outstanding implementation questions, the council voted to separate the rental‑dwelling portion of the fee ordinance from the business‑license section (motion to separate passed 7–0), adopted the business‑license fee changes (vote 7–0), and continued rental‑dwelling fee changes for return after further analysis and stakeholder engagement (motion to continue passed 7–0). Staff indicated an effective date of April 1 for the business fee changes to allow software and configuration work.
Key procedural and practical points: the fee study calculates base administrative cost, a small per‑license customer‑service allocation, and per‑category disproportionate costs derived from mapped police and fire calls; state statute limits the costs the city may recover and requires a disproportionate rental fee to be paired with a 'good landlord' program and landlord fee‑reduction pathway if implemented.
Council asked staff to provide detailed breakdowns of inspection timing, which departments conduct inspections or reviews, and clearer documentation of how per‑unit inspection time and costs were derived before bringing rental‑dwelling fee changes back to the council.
