By Stan Sauerwein
It was a shocking year-end present. In the final hours of 2004, brokers in Vernon opened their Christmas mail to learn the Interior city's politicians had fired a broadside aimed at their cash registers.
Without consultation, in December, the city council determined to re-draft its business licensing criteria. Explained by letter as an attempt to bring regulations for insurance brokers into line with those used for professionals like lawyers and accountants, the council declared every insurance brokerage employee with a professional designation would be required to purchase a separate business license.
In offices like Capri Insurance Services with more than 30 employees, most of whom were licensed with at least Level 1 designation, the new rules meant the annual city bill could potentially jump by as much as 3000 per cent.
It wasn't as drastic for A.E. Berry Ltd. But, according to the city's calculations the brokerage's license would be four times higher than it was the previous year, and that was simply unacceptable to Ruth Hoyte. The insurance business, created by C.F. Costerton in 1891, has been maintained by the family in Vernon through four generations. Ruth and her husband Dave, run the brokerage from the same offices that were opened nearly 75 years ago.
The hike in fees was an ill-considered boondoggle as far as Ruth was concerned.
"I took offense to that," she says, "and decided to do something about it if I could."
For the past president of the Vernon Chamber of Commerce, the 'something' became a flurry of lobbying efforts over a one-week period that was a perfect example of how to take on city hall - and win.
Ruth is accustomed to dealing with government. She has been involved in a number of local organizations and charities in Vernon for years, including the Okanagan Employment Enhancement Society, Vernon Women in Business, Vernon Dance Centre Society and the Downtown Vernon Association.
Vernon Mayor Sean Harvey has described Ruth as a "likeable pit bull" for the way she took hold of the issue. Her tactics provide a good object lesson for anyone faced with a similar situation in their own municipality.
Of prime concern for Ruth was the fact the city officials did not seem to understand how her business operated. They had estimated the number of new licenses required without consultation. Real estate agencies, also the focus of the new bylaw, similarly received inaccurate assessments. In their cases, according to Hoyte, real estate listings had been used to estimate the number of licensed agents in an office.
"It looks like the ones that hadn't advertised got a lower assessment," she suggests.
Ruth began her campaign to fight the bylaw by contacting the city's bylaw enforcement officer for an explanation of the fee hike. "I let her (bylaw officer) know how we operate our business. I explained that the vast majority of employees in insurance brokerages are licensed, but that basic Level 1 licensed employees are just clerical. I asked her why a clerical person operating in the city would require a business license, but she didn't have a particularly good explanation."
So, Ruth sought a higher authority. She contacted Vernon's City Administrator, requesting a history on the file. "He said the change was to make the bylaw consistent with the other communities in the Okanagan, but I knew that wasn't correct." Ruth had taken the precaution of contacting a number of brokers in Kamloops and Kelowna beforehand. "I knew it was a matter of interpretation. Their interpretation of the bylaw and what the other communities were doing was different."
While she served as the President of the Vernon Chamber of Commerce, Ruth gained some notoriety locally because of the positive, often humorous approach she had to getting publicity for business issues. "I always did media interviews with pom-poms in my hands to show I was a cheerleader for business in Vernon. It was sort of my trademark," she says.
Like a squad leader, Ruth began to muster her forces.
"I contacted the brokers in my area who were either unaware or unsure about exactly what was going on. The consensus was this bylaw was somewhat punitive and that it wasn't going to be acceptable as it was being interpreted."
Acting on behalf of her fellow brokers, Ruth then broached city councilors and the mayor for an explanation about the bylaw changes. "I started with the councilors who opposed it," she says.
"Then I contacted the representative for the provincial real estate board." Because Prospera Credit Union owns Vernon Insurance, she also contacted the central credit union organization, CUISA. To fill out her team of objectors to the bylaw change, she contacted the Canadian Federation of Independent Business and the IBABC as well.
"I was trying for a consistent approach, with the backing of these groups, to ask for a review of the bylaw." But, to have that occur, Ruth learned she needed a council member who'd voted in the affirmative to officially request a second look at the bylaw. "You have to have the bylaw reviewed or rescinded within a month of it actually being passed and we missed that deadline," she says.
Rather than take a political approach when faced with that bureaucratic hurdle, she opted to pursue a quiet, behind-the-scenes strategy seeking co-operation with the city. "I was able to sit down (with City administrators and politicians) before Christmas and explain how our offices worked and why it was inappropriate for the city to proceed this way."
She was rewarded with a positive response. "We came up with a rough compromise on how the bylaw would be interpreted and managed to have the vast majority of licensing fees reduced to a satisfactory level without having to go through the rigmarole a formal presentation to council."
The fee now includes the license for the business itself and only Level 2 or higher designations (and independent producers in a brokerage) need to buy an additional license. As a group, the brokers in Vernon will develop a definition of producer which will be forwarded to the city. "There are only three brokerages in this area who would have just one or two producers that qualify under this definition," says Hoyte.
Hoyte says Vernon city officials were reasonable and responsive. "They (city council) want to make nice. They want to resolve situations before they get out of hand. But, I had a feeling they felt there was somewhat of a movement against this bylaw interpretation," and the prospect of that political football may have encouraged co-operation.
She says Vernon insurance brokers were satisfied with the compromise. "If we had approached it in an adversarial way, they (city officials) could very well have dug their heels in and slapped the full fee for every employee," and then argued changes after the fact.
The bylaw enforcement department has also left it to the brokers to report how many employees qualify as requiring a separate license.
"Everyone is happy with the negotiations we've had," says Sue Blakely, bylaw enforcement officer and Business Licensing Inspector in Vernon. "No one is complaining with the assessment or what we've determined their fee would be."
Blakely adds the compromise reached has set a precedent for new brokers arriving in the city as well.
The Vernon brokers will be meeting at the Ward level this month to craft a definition of producer for the city officials, and hash out other details to ensure the assessments for licenses are equitable.
However, while she won the license battle with city hall, Ruth is not gloating about the $110 license fee she has in 2005 compared to the $440 it may have been. To operate her brokerage in Kamloops would only cost her $89 using the same terms of reference. In Kelowna it would be just $106. Now, Ruth wants to know why Vernon licensing is more expensive than those larger centres.
She's also looking at broader issues. Hoyte says she objects to the fact that the business vote has been eliminated at the municipal level. Her brokerage's principals have been involved in local elections since the city was incorporated. Now, because she does not reside in Vernon (she lives in nearby Coldstream and only operates a business in Vernon), she has no vote in municipal elections. "It's taxation without representation," she says. Hoyte is prodding business groups to lobby for a review of that provincial legislation by the Union of B.C. Municipalities.
"I would also like to see the business/residential tax ratio reviewed and amended on a municipal level. With the current residential growth in the Vernon area, business is paying a disproportionate amount of the tax base."
That's a subject Vernon's business 'cheerleader' plans to tackle next. Watch out city hall.
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