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City offering businesses a free pass on late fees

on November 11, 2009

The City of Richmond’s finance department has sent letters out to 2,500 business owners and another 6,000 property owners letting them know the city is willing to waive sizeable late fees in order to tempt businesses to acquire a proper license.

According to Antonio Banuelos, the city’s revenue manager, the city will offer the late-fee amnesty through Dec. 31.

The move was approved by the City Council nearly two months ago, but since official word of the program was sent out just last week, Banuelos said the department has yet to receive any delinquent payments – just a lot of phone calls.

Banuelos estimated the city could raise about $300,000 in revenues through the program.

The amnesty comes as Richmond is struggling to raise money. The city collected 12 percent less in taxes during the fiscal quarter ending in June 2009 than it did a year ago, according to MuniServices, the city’s sales-tax consultant. Statewide, tax collectors raked in almost 25 percent less money than in 2008.

“It’s a chance to clean up our database, and also to get rid of businesses that aren’t in business anymore,” Banuelos said. “And, obviously, we like the revenue it brings in.”

The city generated $2.3 million in fees from business licenses during the last fiscal year, which is calculated from July 2008 to June 2009. That’s down from the $3.5 million per year the fees drew in the past, Baneuelos said. License fees were reduced slightly this year, and changes to the payment date resulted in several prorated bills, accounting for the shortfall.

In addition to businesses, property owners in Richmond who rent out their buildings are required to acquire a business license. A typical license for a renter costs $324 per year. Banuelos said that the city has identified 6,000 such landlords who need to pay up.

The city has issued about 6,000 total business licenses, Banuelos said, meaning that should everyone with delinquent fees pay up, the city’s business database would effectively double.

Cesar Segura, 34, has owned Taqueria La Selva on South 23rd Street with his brother and two sisters for close to 12 years. He said that he’s up-to-date with his business license, and called the fees just part of running a business.

“Most of the permits are easy to get,” he said.

Segura acknowledged, though, that wading through the bureaucracy of city government can be daunting. A project to open an open-air patio next to his restaurant has been delayed eight months by the planning commission, he said.

Judy Morgan, who has been the president of the city’s chamber of commerce for 16 years, said she has asked the city to give her a list of the businesses that haven’t paid their license fees. The chamber, she said, would like to set up a task force to encourage those businesses to acquire the proper licenses.

“It is illegal to not have a business license, and most businesses follow the letter of the law,” Morgan said. “But for a small, family-owned business, they spent $300 to $500 for a license, and nobody ever comes to see if they actually have it, so those are tough choices for a small business.”

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