5.04.040 Fees—Calculation

        A.    Except as set forth in HMC 5.04.040(B) the annual fee for a business license will be a base amount plus an additional fee for each full-time equivalent (FTE) in excess of two, up to a maximum aggregate fee, all in amounts set by council resolution. The provisions of HMC 5.04.040(A)(3) and (4) apply in calculating the additional fee as follows:

        1.     An employee normally working 36 or more hours per week for more than nine months out of the year will be considered one FTE.

        2.     An employee normally working less than 36 hours per week or who is temporary or seasonal will be counted as a partial FTE and accounted for based on the employer’s choice of the methods set forth in HMC 5.04.040(A)(2)(a) or (d):

        a.     Partial FTE Schedule Method. An employer must add the fractional FTE for each part part-time employee as set forth in HMC 5.04.040(A)(2)(b) or (c), round to the nearest whole number, and add it to the number of full-time employees to determine the total FTE.

        b.     Based on normal hours per week for a year-round employee:

        i.      One to 11 is equivalent to 1/4 FTE;

        ii.     12 to 23 is equivalent to 1/2 FTE; and

        iii.    24 to 35 is equivalent to 3/4 FTE.

        c.     Based on full-time weekly employment for only a portion of a year:

        i.      Three months or less is equivalent to 1/4 FTE;

        ii.     More than three months up to six months is equivalent to 1/2 FTE; and

        iii.    More than six months up to nine months is equivalent to 3/4 FTE.

        d.     Computation Method. An employer must determine the aggregate annual hours worked by all partial FTEs, divide the total by 2,080, round the quotient to the nearest whole number and add it to the number of full-time employees to determine the total FTE.

        3.     For purposes of determining the number of FTE for a new applicant without a previously established business in the city, an FTE estimate must be based on a reasonable appraisal of employment expectations after six months of operation.

        4.     An additional annual maintenance fee, also consisting of a base amount plus an additional fee for each FTE in amounts set by council resolution, will be assessed for those businesses in the downtown maintenance area bounded by north and south First Avenue on the west, northeast and southeast Fourth Avenue on the east, northeast Lincoln Street on the north, and southeast Baseline Street on the south. The calculation of the amount for each FTE must be in accordance with HMC 5.04.040(A)(1) and (2).

        B.    Exceptions. When a person is engaged in the business of renting or leasing residential dwellings or mobile or modular home lots or spaces, the annual business license fee will be a base amount plus an additional fee for each apartment, house, lot or space in excess of three, up to a maximum aggregate fee, all in amounts set by council resolution. No business license or fee is required for persons operating three or fewer units.