License Fees for Some Santa Clarita Businesses Could Rise

A hike in license fees will add undue hardship to already struggling small businesses, owners of some Santa Clarita firms say about a city proposal. But the city says the hike is necessary to keep up with increased costs levied by the county for license services. On July 13, the Santa Clarita City Council will hold a public hearing and decide whether to pass a new license fee schedule that will charge more for licenses and license renewals of businesses that receive health, safety and code compliance regulation by the county. Santa Clarita businesses required to pay the fees are those that must be approved by city and county agencies. The council will consider phasing in fee increases of more than $100 over a three-year period. Those of $100 or less would take effect 30 days after the resolution’s passage. Mimi Hiller, owner of Cookbooks Plus in Old Town Newhall, said she will attend the meeting as an opponent to the resolution. “Between my landlord raising our rent and having to pay more fees, my business isn’t getting better, it’s getting worse,” said Mimi Hiller, owner of Cooksbooks Plus, located in Old Town Newhall. General bookstores are required by the county to be approved by the fire and sheriff’s departments, and the departments of building and safety and of regional planning, county officials said. They are also required to receive approval by the county’s business license commission. As a general bookstore, Hiller’s business license fees annual renewal fee would increase from $132 to $175 under the proposal. New bookstores opening in the city would see their one-time beginning license fees increase from $1,494 to $1,595.67, though their increases would be phased in. While city officials say the biggest increases will be felt by new businesses, Hiller said every little fee hike counts, especially for a small business like hers, which has had its sales drop by about half over the past two years. No change in years The city is overdue for a license fee change, said Carmen Magana, the city’s financial manager. Starting in the 1999-2000 fiscal year, the county increased the fees it charged Santa Clarita and other cities for issuing and renewing the licenses, basing the increases on a cost-recovery fee study. However, Santa Clarita did not mirror that rate hike for its businesses, which have not seen their fee levels change since 1994. The inconsistency led to 10 years of the city paying the difference for the cost, resulting in a loss of $890,000 for the city’s general fund. “We should have always have been in sync, and this will help get us there,” Magana said. A very small portion of the city’s business community will be affected since only businesses that need to be regulated for health and safety purposes are required to obtain the licenses and renewals, said Jason Crawford, the city’s marketing and economic development manager. Crawford also said he does not expect the change in fees for new businesses, which would receive the most significant increases, to deter future business expansion in the city. That is because Santa Clarita focuses on attracting businesses that would not be required to pay the fees, such as in the biomedical or technology industries, he said. Limited licensing “The city doesn’t require a business license fee for just any and every business,” he said, adding that the Santa Clarita’s limited licensing requirements help set it apart from other cities. Businesses that would see a fee increase include food establishments, general book stores, tow truck companies, massage parlors and private schools. Businesses that would see lower fees include bowling alleys, motels and motor vehicle rental businesses. For food establishments, license renewal fees would jump from $190 to $223 for existing businesses, and first-time license fees would jump from $335 to $424. Airica Rushing said Bella Cucina, the Italian restaurant she manages in Santa Clarita, will likely have to make up the costs of increased rates through its food prices. “Raising our prices but then (offering) more deals will probably be what would happen,” Rushing said. The restaurant has already had to find ways to survive the recession, having recently closed down its other locations and moved to one smaller site. “It’s just discouraging because already in Santa Clarita, we have a lot of fees that we pay for this community,” she said. “It’s very hard when our overhead increases for us to keep our prices down in order for us to make money.”