City council spares fees paid to vendors | PostIndependent.com
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City council spares fees paid to vendors

Glenwood Springs City Council has backed off a plan that would have helped balance the city budget at the expense of small business owners.Council has decided against doing away with vendor fees, paid to businesses for collecting the city’s sales tax and remitting it to the city.Council previously had passed a budget that included eliminating the fees. The budget also includes hikes in utility franchise fees and police traffic fines, and other revenue increases aimed at staving off the need for budget cuts. Without such increases, council was facing the possibility of ending city contributions toward programs such as Summer of Jazz and YouthZone, and cutting most of the city’s recreation programs.Currently, businesses are allowed to keep 2 percent of sales taxes as a vendor fee. On Thursday, council decided that, rather than doing away with vendor fees, it would cap the reimbursements at $50 a month.That means only the 63 largest vendors would be affected by the cap. The vast majority – 1,183 – would not.Under another proposal earlier this year, council would have capped the fees at $100 a month, which would have affected only the 27 largest vendors.That would have generated $39,000 in annual savings to the city’s general fund. The $50 cap is expected to produce $53,000 in savings. Eliminating the fee would have generated an estimated $108,695 in savings.City manager Jeff Hecksel said he believes the city can absorb the budgetary hit of keeping a limited form of vendor fee.”I feel pretty good about being able to make that up over the course of the year,” he said.Council members unanimously agreed to the $50 cap. Some of them say not all small businesses are able to use a computer to process the sales tax, unlike bigger businesses.In an interview, council member Chris McGovern said a lot of record-keeping is required in connection with the sales tax.”I’ve gotten e-mails from folks that say this is work (to process the tax),” she said. “Some people have accountants that take the time to do it. It’s not a slam dunk.”Contact Dennis Webb: 945-8515, ext. 516dwebb@postindependent.com


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