Town Ends Contract for Business Licensing Outsourcing, But Not Soon Enough

"This one got by us," said Fairfax Mayor Larry Bragman at the town council's March 5 meeting.

Bragman went on to call a plan to use a company, Muni Services, to collect business licenses in town "the wrong model for Fairfax."

So, why, some business owners are wondering, is Muni Services still asking them for their license registration and a $25 fee?

After ," the council voted 5-0 to terminate its contract with Muni Services at its March 5 meeting.

Business owners were upset that the town was using an outside company, that the company appeared to be located in Alabama, that the company was charging a $25 fee on top of the license fee, and that the company was asking for personal information, such as social security numbers.

The council noted, unequivocally, that these were legitimate concerns and issues they should have talked to business owners about before approving the plan. But, council members also said that the plan to use Muni Services was designed to save business owners money. A Master Fee study done last year suggested the full cost of administering a license was $110, but most licenses range around $100, which meant that town would have had to raise licensing fees in order to cover costs. The contract with Muni Services was meant to be an alternative to raising the licensing fee.

But Fairfax business owner Jory Prum said the $110 cost is absurd and presented a number of calculations, arguing the cost should be closer to $80.

Prum is also upset that, despite the council's vote to terminate the contract with Muni Services, business owners are still be asked to pay the $25 fee and continue to be asked to submit their licenses to Muni Services.

"Obviously, I'm deeply unsatisfied with the current state of things and feel like we made almost no progress whatsoever," said Prum.

The problem, said Town Manager Michael Rock, is that the contract with Muni Services requires a 60-day termination notice. Approximately 65 percent of the licenses have already been collected and he expects that, by the time the 60 days is over and the contract terminated, nearly all the licenses will have been collected.

If business owners choose not to submit their licenses and pay their registration fee until after the contract with Muni Services is terminated, they could be considered late and charged a late fee. Business licenses are currently due by March 15.

There is some consideration that the late fee may be delayed until after the contract is terminated, but that has not yet been agreed upon.

Additionally, the council has not decided what it will do for business licensing in place of using Muni Services. Rock said they will consider that at either the April or May meeting. But, because licensing is an annual process, the new plan will essentially be for next year's business licensing, he said.

Prum, though, said that isn't enough.

Not only should the town reimburse the businesses that have already paid the $25 fee, he said, but they should also begin collecting the licenses themselves. There is no non-compete clause in the contract with Muni Services, he noted, so the town could begin collecting licenses immediately.

Currently, business owners can drop off their registration at town hall, but it is, then, sent on to Muni Services.

"Not only did they save money, they made us pay for everything beyond the savings," said Prum.