North Little Rock’s decision last summer to consolidate all permit reviews and collections under one department is paying off, city records show, as revenue from North Little Rock business-license fees is up $332,883 from last year.
Fees paid for general licenses were at $1.34 million through February, up from $1.007 million for the same two-month period in 2013, according to a city financial report.
A big part of the increase is that permits, or “occupational privilege licenses,” are being renewed earlier to avoid penalties, North Little Rock City Clerk Diane Whitbey said,the result of a stronger emphasis placed on reminding business owners of the city fees that are due at the start of the year. The city clerk’s office took over all aspects of business fee collections last summer and began an audit of all accounts.
Another part of the increase is from additional revenue in January and February that came from identifying associated fees that the city has missed collecting in previous years, Whitbey said. In October 2003, the North Little Rock City Council approved changes in the city’s business categories and permit fees, but Whitbey said her office’s audit found many fees hadn’t been properly collected.
“We reviewed all of our accounts last summer and discovered some of the coding being used was wrong,” Whitbey said. “We discovered a lot of businesses were in the wrong categories, so they’ve been moved to a category they should have been in to begin with.”
The council’s changes condensed several categories, established base fees plus additional “fee variables” that included charges for the number of employees in service businesses, such as restaurants; the amount of inventory; and charges for “similar” businesses, such as a gasoline station that also sells tires, prepares food or operates a towing service.
“If you operate more than one type of business at the same location, there are different fees for different types of businesses,” Whitbey said. “There can be multiple types of businesses in one location.”
Variables can also be based on square footage for commercial businesses and the number of units for rental properties, she added.
License categories are listed on the city’s website, nlr.ar.gov, under the “Business” tab.
The clerk’s office reviews caused several businesses to start paying fees they hadn’t been charged before, while others saved on fees because they were wrongly categorized, Whitbey said.
From 252 business-license reviews completed in January and February, which can include on-site visits by an assistant city clerk, the city collected an additional $77,719 in revenue compared with the same two months last year, according to figures from the city clerk’s office.
A few of those businesses that were required to pay more called the North Little Rock Chamber of Commerce earlier in the year to complain, said Terry Hartwick, the chamber’s president, adding that they understood when the reason for the added fees was explained.
“We haven’t had any calls lately,” Hartwick said. “After talking to Miss Whitbey, I learned that the fees had not been billed before. And now they were charging them and bringing them up to date.
“The companies did not know they had basically gotten a free ride for several years,” he added. “To some extent, this is what they should have been paying.”
There are about 3,600 active businesses in North Little Rock, “that we know of,” Whitbey said, adding that some people starting a business don’t always know to report to the city. There are more than 4,000 occupational permits on file with the office, according to the overall review her office completed last year, though Whitbey said hundreds are inactive.
All city business or privilege licenses in North Little Rock are due and payable Jan. 2 each year with a listed deadline of Jan. 31. However, no penalty is assessed for renewals until April 1, when 25 percent of the cost is added to the fee. Renewals received after July 1 are penalized 50 percent.
“We just didn’t start looking at it for the money side of it,” Whitbey said of the internal review of permit fees. “When we started looking at it, we were wanting to make sure that people were properly coded.”
Arkansas, Pages 13 on 03/23/2014