Elgin to keep business license program

Those who have been advocating for an end to Elgin’s business license sat in the council chambers Wednesday with mixed levels of surprise at the unanimous City Council vote to keep the program in place.

Chuck Keysor and Craig Mason are co-founders of Elgin OCTAVE, a political group that has been dedicated to forcing a repeal of the business license since the group’s inception in April 2011. While Keysor was shocked no one voted against the program, Mason said he wasn’t surprised at the way it turned out.

“I didn’t expect them to repeal it tonight,” Mason said after the vote.

The group’s board will meet next Feb. 5 to decide its next steps.

In the last six months, hundreds of Elgin residents and business owners have attended past council meetings — most recently filling the chambers during the Jan. 11 meeting.

In a brief presentation to council members about the program, Assistant City Manager Rick Kozal responded to many of the group’s criticisms, highlighting how the program has shifted in response to some of them.

The revenue generated by the business license fee will go directly to the general fund in 2012 instead of being used to fund contracts with the Elgin Area Chamber of Commerce or the Downtown Neighborhood Association for economic development work — a practice questioned by opponents of the license.

Instead, Kozal said that money will go toward programs for small businesses that have yet to be identified.

The cost of the business license varies from $35 to $595 for Elgin businesses, depending on square footage of the business space. OCTAVE has focused heavily on the home-based businesses that are required to purchase a license. Kozal said the city is not trying to regulate the hobbies of its residents and many individuals who work from home do not need licenses.

Only if the intensity of the business reaches the level in which it would need a conditional use permit for zoning because of the business activity would it also need a business license, Kozal said.

Furthermore, nonprofits only need to pay the license fee if they have more than 500,000 square feet of space. But all businesses in Elgin are asked to register in the program, whether they pay a fee or not.

Citing almost 90 percent compliance, Kozal asked council members to give the program more time to work.

“Staff is recommending we give the program the opportunity to do what it was intended to do initially and provide us a reasonable length of time to see if the program benefits for data and economic development initiatives can fully be realized,” Kozal said.

Council members have indicated support for the program because it can be used to populate a database with information about the businesses in Elgin, based on who has a license.

Council members generally agreed Wednesday the program needs work. Several showed concern at the cost of the license for certain businesses who pay various other licensing fees through the city.

An ongoing fee study, set to be completed by September should give the council more information about the fees businesses pay and whether the business license fee should be adjusted in 2013.

In the meantime, the city will begin enforcing compliance with the ordinance immediately, something it has waited to do while the council considered making changes.