Death by a thousand permits


According to a recent study conducted for the U.S. Chamber of Commerce, state regulations and red tape are holding back businesses from creating much-needed jobs. Nevada was rated among the worst states in the nation for job-chilling rules and regulations.

Businesses face a labyrinth of obscure laws, taxes, fees, liabilities and license requirements that can be costly, time consuming, frustrating or even exasperating.

To obtain a mere glimpse of what it's like to run just a tiny bit of the local government regulatory gantlet, I spent a couple of hours one morning recently with a self-styled master of the paperwork maze -- Wes Isbutt, proprietor of the Arts Factory on East Charleston Boulevard, downtown in the Arts District.

For nine years, Isbutt has been jumping through hoops and navigating the various variance loopholes and nitpicking of assorted government inspectors in order to stage, one night a month, a bit of a party at his establishment.

It has since become officially known as First Friday -- a loose-knit celebration of the arts that has grown to encompass dozens of bars, restaurants and businesses along several blocks of Main Street and Casino Center.

Every month Isbutt must collect an assortment of permits and pay hundreds of dollars for various license fees just for his locale's front and back patios so he may serve food and drink. To get a permanent license would cost many thousands of dollars, something hard to come by for a small business owner in recessionary times.

I met Isbutt one recent morning and tagged along as he hit the City Hall licensing office shortly after its 7 a.m. opening in order to avoid the crush of long lines that come later in the day, and then visited the Southern Nevada Health District on Shadow Lane to pay more fees and obtain health permits.

The third-floor business licensing office has nine windows. For the hour and a half we were there, only one window was manned as an average seven or eight people at any one time took a number and waited their turns.

The plaque over each window identified the person at the station as a license technician. Pay records for 2009 showed the city of Las Vegas listing six persons with that title with salary and benefit packages totaling from $78,000 to $115,000 per year. The city also lists 14 "license officers" with pay and benefits in excess of $100,000 per year each.

Isbutt noted it is against the law for a business to give away a glass of wine, so he obtained a liquor/caterer license, which required a 25-year background check at a cost of $2,500. That took eight months. His urban lounge license took a year to get.

As Isbutt waited for No. 81 to be called, he took his stack of already-completed forms and found a vacant counter top so he could fill in several more. He estimates he spends $500 to $600 in fees and takes 12 hours a month completing redundant paperwork, waiting in lines and talking with license clerks.

'Why can't I do it online?'

On this day, among other things, he's getting his temporary event permits for tonight's First Friday event so he may serve food and booze in his parking lot. He has business checks at the ready.

"Why can't I do it online?" Isbutt asks rhetorically. "For a $25 fee (just one of many) how many people have to touch it?" (The license tech later tells him the office had hoped to have online licensing up by July, but September is more likely. A city spokesman later in the day told me business license forms can be obtained online but they must be mailed in or brought to the office in person. He said full online service will not come this year.)

As we wait, Isbutt explains another aspect of the regulatory mandates: All alcohol must be purchased through a distributor. In his case, Southern Wine & Spirits. One night he ran out of tequila and went to a local retailer to replenish. He kept the receipt and was up front about the purchase. For his honesty, he was told he had committed a felony.

As a woman complains at the only open window that she has not yet received a license and her business is scheduled to open the first of the month, Isbutt details other requirements, such as posting signage warning that no one under 21 will be served and that alcohol is not good for the pregnant. Also, each of his servers must have physically on their person three separate cards -- a sheriff's work card, a health card and a TAM Card, which stands for "Techniques of Alcohol Management."

Nevada has no dram shop law, which makes it difficult to sue bars and casinos for liability if a drunken patron gets into a wreck and injures or kills someone. But they do require servers to take a $25, several-hour class every four years on how to spot someone too drunk to serve.

The health card also requires a $50 fee and takes several hours of waiting in line and watching a film every four years.

Once at the window, Isbutt asked about his application for a permanent liquor license, which had been approved by Las Vegas police. The license tech explained that could not be issued until his $1,000 check for an extension of his temporary license cleared -- though it was not due until the first of the month.

As the clerk manually entered data into a computer, Isbutt filled out yet another form, this one an entertainment verification form for his musician, who luckily did not need a business license number for this form. Though there were seven different multi-copy forms on the counter, Isbutt said he would fax over a list of employees for the evening event.

He noted he usually gets his permits in the mail after the event has taken place.

A woman complained aloud to no one in particular -- and with no apparent notice -- about having to wait an hour and a half. There was still only one window open, but each person, if the license tech noticed, was dutifully told to get a time stamp on a green piece of paper so the waiting time could be so noted.

All this for a party?

Today's fees at City Hall totaled $235, but Isbutt couldn't pay at the tech's window. No, he had to go to the sixth floor, to the Department of Finance and Business Services to present a check. That is also where parking tickets are paid, and Isbutt explained the line can sometimes be down the hall. This morning the parking scofflaws slept in.

A few minutes later he was back on the third floor with his receipt, which he slipped to the tech instead of taking another number.

Next, we headed for the Health District. "A health permit is required to serve food. Beer is food. Ice is food," he explains.

"You'd think the city and the county would talk to each other, but they don't." He explains his city license is good anywhere in the state, but not so his county license.

He also takes time to explain the customary inspection routine. His business and liquor licenses get inspected several times a year, but the health inspectors show up at every First Friday. Usually there are two of them with two police officers hanging about.

"They'll get in line, and when it is their turn they'll shove their badges in your face, being mean about it," he says.

He once had a server who forgot to bring her health card, but Isbutt told the inspector he had a photocopy. That wasn't good enough, so he was cited. The cure for the citation? Physically take a photocopy of the health card to the Health District the next Tuesday.

His two temporary food establishment health permits that day cost $262. He filled out paperwork at one window and took the check to another. One clerk said the permits should be available online soon, perhaps in May. But a spokesman for the district said later, though the district hopes to automate certain paperwork online, that it is unlikely to happen this year.

Isbutt doesn't allow any outside vendors to use his property. That would require an events permit and another $500 fee, which hardly makes sense when he estimates he clears a few tens of dollars on food and less than $1,000 on drinks. If the weather is foul, he may lose money. And that's without even getting into the risks of fines for lapses and double fees for filing paperwork late and various potential legal liabilities.

Can you imagine the run-around that greets the novice entrepreneur who doesn't know the ropes like Isbutt?

Remember: When a politician or bureaucrat is bemoaning the declining tax revenues and the resulting cut in government "services," Webster's definition No. 13 of "service" is: "the act of bringing a male animal to copulate with a female."

Thomas Mitchell is senior opinion editor of the Las Vegas Review-Journal. He may be contacted at (702) 383-0261 or via email at tmithcell@reviewjournal.com.

 

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