The City Council has approved changes in Irvine's business license ordinance in an effort to standardize fees and encourage more businesses to seek permits.
Last week's council action significantly reduces the cost to businesses for annual license fees and the penalties charged for operating a business without a license.
City officials estimated that about 20%--or 2,000--of all businesses in Irvine do not hold current business licenses. Bernard M. Strojny, director of administrative services and the budget, said officials hope that the new reduced rates will prompt those businesses "to pay their fair share."
Under the plan approved by the council Tuesday, all Irvine business owners will pay a flat $50 annual license fee regardless of how many people each business employs. Until now, the license fee was $50 plus an additional $3 for each employee over four.
In a survey of Irvine business owners taken several months before the council vote, 41% of the respondents said they favored a flat license fee similar to the one approved.
The council also substantially cut the penalties that businesses pay for not having licenses. City officials estimated that the changes will cut the amount of money that Irvine collects in annual penalty charges from $358,650 to $92,600.
"We hope this encourages people (to buy) their license," Strojny said. "By reducing (the fees and penalties), we hope some business won't view them as too onerous."
The new fees come several years after the city initiated a special business license compliance program. A city memo on the subject described the program as "very successful," noting that it generated $320,000 in new license revenues during the 1991-92 fiscal year.
The council last week also reduced home occupation license fees from $50 to $25.