,'. a. '~ ABBOTSFORD

COUNCIL REPORT

Report No. PDS 012-2014

March 31,2014 File No: 3900-20

To: From: Subject:

Mayor and Council Inder Litt, Senior Business Licence Inspector Proposed Changes to the Business Licence Bylaw

RECOMMENDATIONS

Executive Committee

1. THAT Bylaw No. 2158-2012, "Business Licence Bylaw, 2006, Amendment Bylaw No. 8", be rescinded, at the next Regular meeting of Council;

2. THAT Bylaw No. 2158-2012, "Business Licence Bylaw, 2006, Amendment Bylaw No. 8", which includes the changes as outlined in Schedule "A" of Report No. PDS 012-2014, proceed for third reading, as amended, at the next Regular meeting of Council; and

3. THAT the Mayor and Corporate Officer be authorized to execute all documents related to this matter.

SUMMARY OF THE ISSUE

The Business Licence Bylaw has not had a significant update of categories and fees since 2007. The proposed bylaw changes are being recommended with the intent of:

• clarify existing wording; • reflecting updated Provincial Government designation of certain businesses; • updating licence fees, which were last increased in 2007.

BACKGROUND

Authority to issue business licences is granted to local governments under Community Charter Sections 8(6) and 15, which provide for business regulation and a system of business licencing. Additionally, the City possesses authority to charge fees for those licences under Section 194(1 )(c) of the Charter.

Section 194(4) requires municipalities to make available to the public, on request, a report respecting how a fee imposed under this section was determined. Additionally, case law has established that local governments may not charge fees that are in excess of the cost of providing the related service. This report explains the rationale for proposed licence fee changes, and also provides an analysis demonstrating that fee revenue is not in excess of the costs of providing related services.

Report No. PDS 012-2014 Page 2 of 5

There have been several meetings with Council and committees over the last two years with respect to proposed changes. These are summarized below.

June 11, 2012 - At the Executive Committee meeting of June 11, 2012, staff recommended changes to the Business Licence Bylaw via Report No. EDP 43-2012, that would clarify existing wording, reflect Provincial Government designation of certain businesses, and align the licensing fee structure with neighbouring communities, including proposed fee increases for specific categories. Council referred the report to the Audit and Finance Committee for further discussion.

July 17, 2012 - The Audit and Finance Committee reviewed Report No. EDP 43-2012 and requested that: (1) distinctions be made between large and small real estate offices and seating capacity of restaurants, (2) expanded analysis and rationale be provided regarding the proposed fee increases, and (3) the proposed fee increases be presented to both the Chamber of Commerce and the Economic Development Commission for feedback.

October 15, 2012 - Staff reported back to the Executive Committee of Council via Report No. EDP 194-2012, with an updated Bylaw incorporating the changes requested at the July 17, 2012 meeting of the Audit and Finance Committee. Council requested that the proposed bylaw proceed for three readings at the next Regular meeting of Council.

November 5, 2012 - At the Executive Committee meeting of Council, members of the public questioned the rationale for some of the proposed fee increases. Council referred the matter to staff and requested a more complete report rationalizing the cost recovery aspect of the proposed fees.

September 10, 2013 - The Audit and Finance Committee reviewed an updated cost analysis along with proposed changes to the Business Licence Bylaw. The Committee approved the changes in principle and requested that staff further review fees for pawn shops, financial institution drive-throughs, and oil storage plants and distribution pipelines.

October 7, 2013 - Staff reported back to Council, via report EDP 082-2013, with an updated Bylaw incorporating the review requested at the September meeting of the Audit and Finance Committee. Council deferred the report, asking that staff report back with clarification on how the proposed fees were calculated.

November 12, 2013- The Audit and Finance Committee discussed the approach to setting business licence fees and recommended that fees be increased by an amount reflecting the change in the Consumer Price Index since the last fee increase, and additional increases made to a select few business types. In 2015, a further review of the Business License Bylaw will take place. The review will lead to a comprehensive Bylaw revision.

DISCUSSION

Several amendments are being proposed to the Business Licence Bylaw in order to update definitions and improve the clarity around the categories specified in the bylaw. In addition to a number of housekeeping updates, six new licence categories have been added.

Report No. PDS 012~2014 Page 3 of 5 ----------------------------------------~----~

A list of proposed changes, together with the related rationale, is included in Appendix A. A comparison of current and proposed fees is shown in Appendix B. Appendix C provides a comparison between Abbotsford's proposed fee and the low and high fees charged in a group of comparator cities (Vancouver, Surrey, Burnaby, Richmond, Coquitlam, Kelowna, Kamloops, Nanaimo, Langley Township, Chilliwack, and Mission).

Fees for all licence categories, except for those noted in Appendix A, have been increased by 8.24%. This increase reflects the increase in the Consumer Price Index (all items) for Vancouver, between December 2007 (the last time rates were increased) and September 2013. The proposed fee increase is intended to keep fees in line with general cost increases faced by the public. Proposed fee increases that are different from this CPI adjustment are explained in Appendix A.

Fees are set for business licences based on considerations of the level of resources that are required to regulate those business, whether that be for basic costs of running the licencing program, or for involvement of other resources like fire prevention, bylaw enforcement, planning, policing, or others. Appendix D provides an overview of the types of regulatory activities performed by functional area.

Because of the high number of business categories and the variety and complexity of regulatory activities that are performed by the City in relation to different categories, a precise calculation of licencing-related costs by category is impossible. However, licence costs are set at levels for each category that are judged to be reasonable given the nature of the category.

Additionally, the overall level of licence fees are limited such that total revenue from the program must not exceed the average annual costs associated with licencing and related regulatory activities. Appendix E provides a costing on a total program basis, that confirms that licence fee revenue is less than the maximum allowable limit (Le., the City does not collect more for the business licencing program than is legally allowable).

FINANCIAL PLAN IMPLICATION

The proposed fee increases will generate approximately $75,000 of additional revenue per year. Because of the timing of this increase, 2014 will see approximately 20% of the annual increase, or approximately $15,000. The business licence fee revenue budget in the current financial plan is set at $940,000. With the proposed fee increases, expected revenue in 2014 will be $955,000.

Director of Finance

IMPACTS ON COUNCIL POLICIES, STRATEGIC PLAN AND/OR COUNCIL DIRECTION

Report No. PDS 012-2014 Page 4 of 5

The proposed changes to the Business Licence Bylaw align with the City's Strategic goal to achieve economic balance.

SUBSTANTIATION OF RECOMMENDATION

The proposed housekeeping amendments will increase customer service by providing clear and concise wording and the proposed fee increases will keep fees on pace with general cost of living increases for residents.

Senior Business Licence Inspector

Siri Bertelsen

General Manager, Planning and Development Services

-

•• "~A Appendix A

ABBOTSFORD Rationale

SUMMARY OF BUSINESS LICENCE BYLAW AMENDMENTS

SECTION AMENDMENT RATIONALE

PART 5 - LICENCE REQUIREMENT

Add: Housekeeping. Clarifies 5.10 - (New) requirement.

"A licence is required for each Automated Teller Machine not affixed to a financial institution." Amend 5.2 (a) to read: Housekeeping. Location

5.2 (a) - (Amend) clarification for bylaw "an agri-food processing facility having a floor interpretation. area of less than 600m 2 on property zoned

, Agricultural, as defined in the City's Zoning" ,

PART 11 - SPECIFIC REGULATIONS/LIQUOR ESTABLISHMENTS

r---.-Amend 11.11 to read: Housekeeping. To include

11.11 - (Amend) standardized conditions / terms to ''The following conditions / terms apply to all all businesses licensed under the businesses licensed under the Liquor Control Liquor Control and Licensing Act. and Licensing Act of British Columbia . . . "

SCHEDULE "B" - BUSINESS LICENCE FEES 1.The fees payable for Business Licences shall be as follows:

(Amend) Amend: The proposed fee increases (Appendix B) are based on

Increase all fees by 8.24% increases in overall inflation from December 2007-

(Except for Business Types, as noted below) September 2013 as reported by Statistics Canada, for Vancouver, all items, Consumer Price Index (CPI).

(New) Add: Add to reflect distinct business type.

Accessory Home Occupation

(New)

(New)

(New)

(New)

# ' $ ~~ ABBOTSFORD

Add:

Automated Teller Machine

Add:

Bingo Hall and Community Gaming Centre

New:

Junk Dealer /Junk Peddler/ Scrap Metal Dealer

Add:

Oil Storage Plant/ Pipeline Distribution

$500.00

$3,000.00

$3,000.00

Appendix A

Rationale

Add to reflect distinct business type.

Housekeeping, to create a distinct category with a fee increase of 108%. Currently this business type is categorised as a recreational facility.

Police resources are used to enforce and manage daily submissions from operators required under City of Abbotsford Secondhand Goods Regulation Bylaw. In addition Police resources are used to obtain warrants to gain access to supporting documentation not provided in the submissions.

Create a distinct category with a fee increase of 2,400%.

Clarify licensing requirements and add fee specific to this business type. City incurs emergency response and long term planning expenses in relation to these facilities.

(Amend)

(New)

c • .t~~ ABBOTSFORD

Amend by increasing fee:

Pawn Shop

Amend "Liquor Primary" to include:

$1,000.00

Operating Bar Watch Standards $563.00

Not Operating Bar Watch Standards $7,000.00

Appendix A

Rationale

City incurs enforcement costs specifically associated with this type of business.

Police resources are used to enforce and manage daily submissions from operators required under the City of Abbotsford Secondhand Goods Regulation Bylaw.

Create a distinct category with a fee increase of 456%. The Bar Watch program standard has proven to result in reduced costs of policing.

Create a distinct sub category "Operating Bar Watch Standard". The existing fee for Liquor Primary will be placed on this sub category and under the proposed 8.24% increase the fee will increase to $563.00 from $520.00.

Create a distinct sub category "Not Operating Bar Watch StaOndards" with a fee increase of 1,246%.

-. '

Appendix 8

00 .~~ Proposed Fee Increase

ABBOTSFORD Comparison

Type of Licence Current Increase Proposed

New - Accessory Home Occupation $120,00 $10,00 $130.00

Accessory Home Occupation - Farm Equipment Repair $280.00 $23.00 $303.00

Amusement Facility $240.00 $20.00 $260.00

Apartment, Hotel, Motel, or Resort (five to 10 units) $165.00 $14.00 $179.00

Apartment, Hotel, Motel or Resort (more than 10 units) $220.00 $18.00 $238.00

Auto Recycler $185.00 $15.00 $200.00

New - Automated Teller Machine NA NA $130.00

New - Bingo Hall and Community Gaming Centre $240.00 $260.00 $500.00 , ~

Cabaret $1 ,560.00 $129.00 $1,689.00

Carnival, per day $290.00 $24.00 $314.00

Charitable Activity (Temporary) $65.00 $5.00 $70.00

Charitable Sales and Services $75.00 $6.00 $81.00

Commercial Use or Industrial Use $120.00 $10.00 $130.00 (0 to 800 m2

/ 8621 sq. ft of usable area, not described elsewhere)

Commercial Use or Industrial Use (801 to 1800 m2

/ 8622 - 19,385 sq. ft of usable area, not $180.00 $15.00 $195.00 described elsewhere)

Commercial Use or Industrial Use (1801 m2

/ 19,386 sq. ft and over, not described elsewhere) $240.00 $20.00 $260.00

· . Appendix 8

•• .:~~ Proposed Fee Increase -- Comparison ABBOTSFORD

Direct Sellers $220.00 $18.00 $238.00

Exhibition Complex $1,200.00 $99.00 $1,299.00

Film Production $260.00 $21 .00 $281 .00

Financial Institution $520.00 $43.00 $563.00

Flea Market $360.00 $30.00 $390.00

Food Primary (Restaurant licensed to serve liquor) $270.0 $22.00 $292.00

Food Primary (Lounge) $270.00 $22.00 $292.00

Fuel Service Station with or without Convenience Store $120.00 $10.00 $130.00 plus plus $20.00 $2.00 $22.00 per Fuel per Fuel Dispens'e'f" Dispenser

Ice Cream Vendors, Mobile $120.00 $10.00 $130.00

New -Junk Dealer/Junk Peddler/Scrap Metal Dealer $120.00 $2880.00 $3000.00

Licencee Retail Store $270.00 $22.00 $292.00

Liquor Primary

New -Operating Bar Watch Standards $520.00 $43.00 $563.00

New -Not operating Bar Watch Standards $520.00 $6480.00 $7,000.00

Liquor / Food Primary $520.00 $43.00 $563.00

Non-Permanent Commercial Sales $80.00 $7.00 $87.00

New -Oil Storage Plant / Pipeline Distribution NA NA $3,000.00

Parks, Recreation and Culture Facilities $1,050.00 $87.00 $1 ,137.00

Pawn Shop $180.00 $820.00 $1,000

Recreational Facility $220.00 $18.00 $238.00

----

.. .. ~~ ABBOTSFORD

Restaurant with Drive-up Window

Second Hands Goods

Supportive Recovery Use

Trade Show (other than in Licensed Exhibition Complex), per day

All other Businesses not listed above

2. Administration fee; additional copy of an issued licences

3. Re-inspection fee

Appendix 8

Proposed Fee Increase Comparison

$220.00 $18.00 $238.00

$180.00 $15.00 $195.00

$200.00 $16.00 $216.00

$45.00 $4.00 $49.00

$120.00 $10.00 $130.00

$25.00 No Change

$65.00 No Change

Type of Licence

o. t~~ ABBOTSFORD

New - Accessory Home Occupation

Accessory Home Occupation - Farm Equipment Repair

Amusement Facility

Apartment, Hotel, Motel, or Resort (five to 10 units)

Apartment, Hotel, Motel or Resort (more than 10 units)

Auto Recycler

New - Automated Teller Machine

New - Bingo Hall and Community Gaming Centre

Cabaret

Carnival, per day

Charitable Activity (Temporary)

Charitable Sales and Services

Commercial Use or Industrial Use (0 to 800 m2 j 8621 sq. ft of usable area, not described elsewhere)

Commercial Use or Industrial Use (801 to 1800 m2 j 8622 - 19,385 sq. ft of usable area, not described elsewhere)

Commercial Use or Industrial Use (1801 m2 j 19,386 sq. ft and over, not described elsewhere)

Appendix C

Regional High and Low Fee Comparison

Lowest1

Kamloops $67 Kamloops $67

Mission $148 Burnaby $90 (10 Units)

Mission $148 Vancouver $129

Coquitlam $23 Mission $148 Mission $148 Surrey $30

Burnaby $0

Burnaby $0 Vancouver $129

Vancouver $129

Mission $148

Highest'

Burnaby $270 Nanaimo $165

Vancouver $4,781 Surrey $48 (Per Unit)

Surrey $48(Per Unit)

Surrey $912

Surrey $183 Surrey $3,631 Surrey $3,631 Burnaby $585+$196 day Nanaimo $165 (>5 days) Nanaimo $165 Richmond $548

Richmond $969

Richmond $2,900

Abbotsford

$130

$303

$260

$179

$238

$200

$130

$500

$1,689

$314

$70

$81

$130

$195

$260

Appendix C

•• t~~ Regional High and Low ABBOTSFORD Fee Comparison

Type of Licence Lowest Highest Abbotsford

Direct Sellers Kelowna Kamloops $238 $71 $438

Exhibition Complex Mission Surrey $1,299 $148 $1,200

Film Production Langley(Township) Burnaby $281 $128 $504

Financial Institution Kamloops Coquitlam $563 $124 $1,400

Flea Market Vancouver Richmond $390 $129 $609

Food Primary Mission Burnaby $292 $148 $790-$829

Food Primary (Lounge) Mission Burnaby $292 $148 $790-829

Fuel Service Station with or without Kelowna Burnaby $130 Convenience Store $127.51 $545 plus $22

per Fuel Dispenser

Ice Cream Vendors, Mobile Kamloops Burnaby $130 $57 $323

New-Junk Dealer/Junk Peddler/Scrap Metal Kelowna Surrey $3000 Dealer $128 $3,636

Licencee Retail Store Mission Kelowna $292 $148 $639.22

Liquor Primary Mission Burnaby N/A $148 $3000

New-Operating Bar Watch Standards N/A N/A $563

New-Not operating Bar Watch Standards N/A N/A $7,000

Liquor / Food Primary Mission Burnaby $563 $148 $829

Non-Permanent Commercial Sales Chilliwack Coquitlam $87 $25 $280

New-Oil Storage Plant / Pipeline Distribution Kamloops Burnaby $3,000 $1,234 $3,000

02 1~~ ABBOTSFORD

Parks, Recreation and Culture Facilities

Type of Licence

Pawn Shop

Recreational Facility

Restaurant with Drive-up Window

Second Hands Goods

Supportive Recovery Use

Trade Show (other than in Licensed Exhibition Complex), per day

All other businesses not listed above

NA

Lowest

Mission $148 Kelowna $128

Mission $148 Mission $148 Kelowna $128 Vancouver $35

Kelowna $128

Appendix C

Regional High and Low Fee Comparison

NA $1,137

Highest Abbotsford

Coquitlam $1,000 $10,000 Burnaby $238 $985

Vancouver $238.00 $679 Surrey $195.00 $3,636 Burnaby $216.00 $627 Burnaby $49.00 $426

Burnaby $130.00 $426

1. Data based on 2013 business licence fees for Vancouver, Surrey, Burnaby, Richmond, Coquitlam, Kelowna, Kamloops, Nanaimo, Township of Langley, Chilliwack and Mission. Data compiled by City Manager's office November 2013.

Appendix D

Overview of Business Licencing and Regulation Activities by Function

Planning and Development Services play key roles by creating and maintaining land use regulations, providing guidance and interpretation for staff and customers.

Business Licencing and Bylaw Enforcement staff enforce business licence and land use regulations. Staff administer and enforce the business licence program and receive customer service, clerical and administrative support from the Building Permits and Licencing Department.

The Abbotsford Fire Rescue Service Prevention and Inspection Division are involved in the initial processing of certain types of applications and ensure businesses comply with public safety code requirements. Annual/semi-annual inspections of all public buildings are conducted which include businesses as mandated under the Fire Services Act.

The Abbotsford Police Department is also involved in the regulation of businesses. Their involvement includes; enforcement of the Secondhand Goods Regulation Bylaw, crime prevention activities, community safety initiatives including Bar Watch Program, Integrated Services Enforcement Team (lSET), and Crime Free Multi-Housing. Police costs have not been included in the cost analysis provided in Appendix C, due to the complexity required for estimating resources used.

• ,

Appendix E

City of Abbotsford Business License Fee Analysis

Costs associated with regulating business in Abbotsford . 2014 Budget Cost

Related to Recovery via Cost Recovery Net Business Other via Other Regulatory

Description 2014 Budget Allocation1 Regulation Sources (%) Sources ($) Costs

Building Inspections $ 122,100 10% $ 12,200 n/a $ $ 12,200 Manager, Building Inspections 2 122,100 10% 12,200 n/a 12,200

Business Licenses 244,800 100% 244,800 16% 39 ,200 205,600 Senior Business License Inspector 2 92,200 100% 92,200 16% 14,800 77,400

Bylaw Officer (Business License Department) 2 75,400 100% 75,400 16% 12, 100 63,300

Business License Assistant 2 59,800 100% 59,800 n/a 59,800

Services and Supplies 17,400 100% 17,400 16% 2,800 14,600

Planning Services 3,920,000 15% 588,000 20% 117,600 470,400 Bylaw Enforcement 1,033,000 15% 155,000 20% 31 ,000 124,000 Fire Prevention & Inspection 596,000 70% 417,200 9% 37,500 379,700

General Government Overhead3 8% 95,400 n/a 95,400

Total $ 1,512,600 $ 225,300 $ 1,287,300

Annual business license revenue based on proposed fee structure (2014 dollars): 1,015,000

Excess of regulatory costs over proposed business licence revenue: $ 272,300

Updated: March 11,2014

Notes:

1. The percentage allocated reflects estimated resources used by each area/position on regulatory functions related to businesses, desireable for recovery through licence fees.

2. Position costs reflect total employer costs (i.e., including employer costs for EI, WCB, benefits, etc.); not the annual salary of the position.

3. Includes Corporate Services-Business & Technology Solutions, Human Resources, Mayor & Council, City Clerk and Building Maintenance costs.

4. Policing costs have been excluded from this analYSis due to the complexity required for estimating resources used.

CITY OF ABBOTSFORD

BUSINESS LICENCE BYLAW, 2006, AMENDMENT BYLAW NO. 8

Bylaw No. 2158-2012 Page 1

Final Draft March 18, 2014

The Council of the City of Abbotsford, in open meeting assembled, ENACTS AS

FOLLOWS: 1. CITATION

Bylaw No. 2158-2012 may be cited as “Business Licence Bylaw, 2006, Amendment Bylaw No. 8”.

2. AMENDMENTS

Bylaw No. 1551-2006, cited as “Business Licence Bylaw, 2006”, as amended, is further amended by: (a) deleting and replacing Section 5.2 (a), as follows:

“(a) an agri-food processing facility having a floor area of less than 600 m2 on

property zoned Agricultural, as defined in the City’s Zoning Bylaw;”; (b) adding a new Section 5.10, as follows:

“5.10 A licence is required for each Automated Teller Machine not affixed to a

Financial Institution.”;

(c) deleting and replacing Section 11.11 preamble, as follows: “11.11 The following conditions/terms apply to all businesses licenced under the

Liquor Control and Licensing Act of British Columbia, including but not limited to terms and conditions in the nature of:”; and

(d) deleting and replacing Schedule “B” with the attached Schedule “B”. READ A FIRST TIME this 15th day of October, 2012 READ A SECOND TIME this 15th day of October, 2012 READ A THIRD TIME this 15th day of October, 2012 THIRD READING RECINDED this day of , 2013 REREAD A THIRD TIME this day of , 2013 NOTICE OF INTENTION TO ADOPT Bylaw published this day of , 2013 and day of , 2013 ADOPTED this day of , 2013 I hereby certify this to be a true copy of the original R. Bruce Banman bylaw Mayor Katie Karn William Flitton Deputy City Clerk Corporate Officer

CITY OF ABBOTSFORD

BUSINESS LICENCE BYLAW, 2006, AMENDMENT BYLAW NO. 8

Bylaw No. 2158-2012 Page 2

Final Draft March 18, 2014

SCHEDULE “B”- BUSINESS LICENCE FEES

1. The fees payable for Business Licences are as follows:

Type of Licence Licence Fee

Accessory Home Occupation $130.00

Accessory Home Occupation – Farm Equipment Repair $303.00

Amusement Facility $260.00

Apartment, Hotel, Motel, or Resort (five to 10 units) $179.00

Apartment, Hotel, Motel or Resort (more than 10 units) $238.00

Auto Recycler $200.00

Automated Teller Machine $130.00

Bingo Hall and Community Gaming Centre $500.00

Cabaret $1,689.00

Carnival, per day $314.00

Charitable Activity (Temporary) $70.00

Charitable Sales and Services $81.00

Commercial Use or Industrial Use (0 to 800 m² / 8621 sq. ft of usable area, not described elsewhere)

$130.00

Commercial Use or Industrial Use (801 to 1800 m² / 8622 – 19,385 sq. ft of usable area, not described elsewhere)

$195.00

Commercial Use or Industrial Use (1801 m² / 19,386 sq. ft and over, not described elsewhere)

$260.00

Direct Sellers $238.00

Exhibition Complex $1,299.00

Film Production $281.00

Financial Institution $563.00

Flea Market $390.00

Food Primary (Restaurant licenced to serve Liquor) $292.00

Food Primary (Lounge) $292.00

Fuel Service Station with or without Convenience Store $130.00 plus $22.00 per Fuel

Dispenser

Ice Cream Vendors, Mobile $130.00

Junk Dealer/Junk Peddler/Scrap Metal Dealer $3,000.00

CITY OF ABBOTSFORD

BUSINESS LICENCE BYLAW, 2006, AMENDMENT BYLAW NO. 8

Bylaw No. 2158-2012 Page 3

Final Draft March 18, 2014

SCHEDULE “B”- BUSINESS LICENCE FEES (cont’d)

Type of Licence Licence Fee

Licencee Retail Store $292.00

Liquor Primary Operating Bar Watch Standards $563.00

Liquor Primary Not Operating Bar Watch Standards $7,000.00

Liquor / Food Primary $563.00

Non-Permanent Commercial Sales $87.00

Oil Storage Plant / Pipeline Distribution $3,000.00

Parks, Recreation and Culture Facilities $1,137.00

Pawn Shop $1,000.00

Recreational Facility $238.00

Restaurant with Drive-up Window $238.00

Second Hands Goods $195.00

Supportive Recovery Use $216.00

Trade Show (other than in Licensed Exhibition Complex), per day

$49.00

All other Businesses not listed above $130.00

2. Administration fee; additional copy of an issued licences $25.00 3. Re-inspection fee $65.00