After hearing from supporters and board members of the Sequim Open Aire Market, the Sequim City Council decided last week to hold off increasing fees for the venture and charging it for a business license.

Capital projects manager Frank Needham said the proposal was to charge the Sequim Open Aire Market $4 per vendor per weekend plus $758 street rent, up from the current $260, but they haven’t solved the business license question.

City attorney Craig Ritchie said there are some specific statutes regarding the public aspects of farmers markets that allows them to be exempted from business license requirements.

City Councilor Bill Huizinga said there were lengthy discussions in 2006 regarding business licenses for farmers markets and events such as the Sequim Irrigation Festival and Sequim Lavender Festival.

Ritchie said business licenses are a revenue source, not a regulatory mechanism, but they must be uniform.

Manager Mark Ozias said the Open Aire Market addresses 14 goals contained in seven chapters of the city’s comprehensive plan, so it has a "broad and deep public benefit." So he is surprised that the Open Aire Market’s street rent is being tripled. Vendors pay the market a flat $50 fee and a percentage of the street rent, Ozias said. The amounts sound small but that could equal a 20- to 40-percent cost increase for some vendors, he said.

"It’s clearly a move in the wrong direction," Ozias said, adding every city except Seattle reduces fees for farmers markets.

"It is a punitive increase that is broader than the benefit. So reduce or eliminate the fees," he said.

City Councilor Paul McHugh asked if meeting 14 goals in the comprehensive plan was enough to warrant fee exemptions.

"It’s your decision," Ritchie said.

The council just has to set forth the justification for exempting the farmers market from fees and then see if it meets that criteria, such as having 20-percent farmers, he said. It’s not the same as the Lavender and Irrigation festivals, Ritchie said, proposing perhaps they could charge a group business license fee.

Ozias said the Open Aire Market is happy to continue paying fees and is OK with paying more but tripling the street rent seems unnecessary.

"I understand there’s a potential fairness issue but the whole is greater than the sum of its parts," he said.

Open Aire Market vendors pay a membership fee plus rent based upon sales, Ozias said. The Sequim Open Aire Market generates $250,000 in sales tax revenue annually.

Huizinga said the proposed fee increases seemed like kind of a knee-jerk reaction to a tight budget.

McHugh said only a few businesses are paying the business license fee and so it seems as though they are aiming for "the slow-moving targets" to pay it.

It’s also a question of fairness, he said.

City Councilor Ken Hays said fairness is an important issue so maybe more research on what other cities are doing is needed. The Sequim Open Aire Market is a complex mix of vendors so they should check other cities, he said.

Needham said events such as the doll show at the Guy Cole Convention Center get a temporary event permit.

"We have an affinity for the farmers market," City Councilor Erik Erichsen said.

Market board of directors president Carol Smith said most vendors are retired or on disability or Social Security. Most cities waive business license fees for farmers markets and provide cheap rent, she said. Bellingham built an area for its farmers market, Smith noted.

"The market is one big conglomerate. If you hit them with these fees, you’ll kill them," she said.

McHugh said, "My issue is fairness. It seems like we’re creating a separate class of businesses and 50 percent of businesses don’t pay the business license fee anyway."

The projected $16,500 in additional revenue from the increased fees is not a lot so they should leave it alone until they can take a look at it, McHugh said.

Needham said he will check with the Association of Washington Cities and Municipal Research and Services Center to see what other cities are doing.