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Realtor Licensing Raises Concerns

POSTED March 8, 2011 11:22 p.m.

An addendum to the Oakdale City Council agenda to include the city manager’s report on business license fees for real estate agents brought a full house to Monday night’s council meeting, March 7, predominantly an audience of local Realtors.

After a check of unlicensed businesses in the city, including real estate agents, the finance department last week sent a letter notifying local real estate agents that they were subject to individual business licensing fees and had 15 days to apply for a license.

The city ordinance cited by the finance department basically states that those who do business in the city, and are not employees of a business, must have a license. The agents countered that they are “employees” and their work goes through a broker or main office that has a business license for the city in which they’re located.

City Manager Steve Hallam reported that he had met with several individual sales agents upset over the issue and was planning on attending a Board of Real Estate Agents meeting later this month. Hallam proposed to the council that enforcement of the license fee to real estate agents be put on hold.

Councilman Michael Brennan suggested that the matter be researched and ordinance wording possibly revised.

Six individuals, all local real estate agents, addressed the council on the subject. The agents stated they would be subject to “double taxation” if both they and their broker were subject to the license.

“I don’t operate a business in Oakdale,” said one speaker. “I work for a company that does.”

Speakers also reminded the council of the community involvement of local Realtors and the money that they raise for various groups in the city.

Other speakers were upset that the fees could go back two years and at the strong wording of the letter that, in addition to notable spelling errors — as some that received it pointed out — stated they had 15 days to get the license.

Mayor Pat Paul admitted she was surprised at how the matter was handled and stated that the real estate office should have a license, but not the individual agent.

Councilman Tom Dunlop mentioned he thought the 15-day requirement was unfair and also suggested they revisit the code’s wording. He also brought up that the code must be fair to other businesses that are required to have a license. Dunlop pointed out that even though he was a business owner under his name, he was required to have multiple licenses for his businesses.

The council called for Hallam to attend the real estate meeting for input and also the possibility of forming a committee of the council and Realtors.

After the council meeting, Finance Director Albert Avila said his department has been assigned a volunteer to replace a retired worker to assist in getting business licensing updated and reveal which businesses do not have a license.

“We’re turning every rock to get money (for the city),” Avila said. “We’re searching phone books, everywhere we can, to look for businesses subject to a license.”

Avila also said that his department’s research has shown not all real estate offices have a business license.

Avila also pointed out that the broker only pays taxes and fees on their profit and not on what is paid out to the agent.

In other items at the meeting, the council voted 4-1, with Councilman Jason Howard dissenting, to establish a 2-tier retirement system with CalPERS, the state agency for public employee retirements. New city employees will now be under a different formula that will save the city close to 50 percent over what it is paying for current employees.

“We’re in no hurry here,” said Howard during discussions. “We’re not hiring anyone, there’s a hiring freeze.”

The council also heard a proposal from Recreation Supervisor Linda Royalty to lower rental fees for city facilities such as the Bianchi Community Center and Lemmons Senior Center. There has been a decrease in the rental of the facilities. A lowering and revision of the fees is hoped to encourage more use, she said.

Council members also approved modified business hours, revising a previous proposal on city offices being closed one day per week in favor of opening for public business two hours later. The plan is in hopes that city workers have uninterrupted time to catch up on a daily backlog due to a cut in staff.

The public works department also received instruction to no longer provide services for sewer line or water pipe repairs or modifications on private property. The public works department will still respond to emergency situations involving those lines.

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