City businesses face more fee hikes 

Businesses should brace for higher fees as The City struggles to close a more than $500 million budget shortfall next fiscal year.

Apartment complex owners could see a 50 percent increase in fees for vector and health inspections, and masseuses are facing a 38 percent increase in fees for massage therapy programs.

Starbucks, Cheesecake Factory and other franchised restaurants likely will be slapped with a $285 fee to enforce San Francisco’s new menu-labeling law, said Richard Lee, director of Environmental Health Regulatory Programs with the Department of Public Health.

Monthly water rates are increasing starting July 1 from $3.35 per 100 cubic feet (about 748 gallons) to $3.89. The higher water costs are supposed to pay for part of $4.6 billion in water-system upgrades.

Some merchants will have to pay higher fees starting next month if they want parking near their businesses, city officials said.

Businesses that store or deal with hazardous materials likely will see a 5.5 percent increase in fees.

Businesses already are coping with increasing costs, including mandated health care and paid sick leave for employees. Increasing fees, especially during a recession, is going to make or break many businesses, merchants say. As the recession continues, fewer businesses are opening and more are closing.

“It’s the straw that breaks the camel’s back,” said Janet Clyde, co-owner of Vesuvio Cafe in North Beach and a member of the Small Business Commission. “San Francisco got addicted to fees. I think The City needs do more work improving the general business climate, and that means at least stopping the [fee] increases.”

But fee increases have become an easy go-to every year as The City faces budget shortfalls, Clyde said. City departments, under pressure to cut their own budgets by 20 percent, say much of the increases are to recover program costs.

Costly fees have led the San Francisco Apartment Association to consider gathering signatures for a measure that would require fee increases to be approved by voters, not the Board of Supervisors.

Last year, apartment owners were hit with a new healthy-home inspection fee costing between $55 and $228 for inspectors to survey apartment complexes for overgrown vegetation, vectors and other public health issues.

A year later, that same fee is proposed to increase 50 percent, which would affect more than 4,000 apartment owners, according to the Department of Public Health.

“People are going to be angry at The City and at the health department for using their buildings as an ATM,” said Janan New, director of the San Francisco Apartment Association, which represents more than 3,000 complexes.

As the unemployment rate has increased to an all-time high, policymakers have taken note of the financial burden businesses face. Earlier this year, Supervisor David Chiu proposed legislation to eliminate 71 fees for businesses. That legislation is expected to be heard at the committee level in the next few weeks.

Mayor Gavin Newsom this week said he wants to go beyond Chiu’s legislation. He plans to go fee by fee with departments to determine which ones are unnecessary. All of this has to be done before the budget is adopted July 1.

“We should reduce fees wherever we can, especially in this economy,” said Tony Winnicker, a Newsom spokesman. “It can add up if you are a small business, and we have to take a look at how we can streamline and eliminate fees that aren’t critical.”

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