Staff recommends Council review the enclosed DRAFT massage business license ordinance and determine if it is ready to be considered for adoption.

On November 27, 2017, Council member Sullivan spearheaded an initiative, that was approved by the Council, to develop an ordinance to eliminate illicit massage businesses/spas in Billings.  The Council's adopted priorities for 2019 and 2020 both included direct references to adopting a message business license ordinance to assist the City's efforts to improve safety.  Since that time, there have been a significant amount of resources spent on researching and drafting the proposed ordinance. Staff have met with stakeholders, including local massage therapists, and requested input and feedback on the draft ordinance in an attempt to find a mutually acceptable draft.  I have come to the conclusion that additional regulations of any kind will be apposed by some members of our community.  The current draft has been reviewed by Administration, Code Enforcement, Finance, Police Department, as well as Legal for input.
 
This ordinance is a business license requirement and does not regulate spas/massage therapy businesses in a criminal arena. It does not allow for law enforcement inspection beyond established legal authority for such searches.  However, we do believe the business license process and enforcement, will reduce the number of illegal businesses operating within our city limits. 

Billings has a significant problem with illicit massage businesses (IMBs).  Federal Borough of Investigations (FBI) data from 2017 tracked commercial sex ads in Montana. Bozeman and Missoula had nearly 5,000 ads, while other MT cities had between 2,000 and 3,000 and Billings had nearly 20,000.  IMBs are considered to be a primary source of these ads.  Over the past five years, there have been between 15 and 27 IMBs operating within our City on any given night.  It is estimated that a woman at a Billings IMB provides sexual services to 25-35 men, generating up to $18,000 per month. 

This illegal activity is contributing to the City's crime problems.  No one approach will eradicate this from our community.  I believe Implementing this business license ordnance is one of the least expensive ways to chase several of these illegal businesses out of our community.
 
 

City Council may direct staff to place this item on a Regular Council meeting agenda or provide specific direction on how to proceed with any amendments.

The application for this business license fee will be $25 for the first year - July 1, 2021 to June 30, 2022.  After July 1, 2022, the fee will be increased to $55.  This is the easiest way to provide a credit back to the massage businesses who will be required to have a background check for the first year.  According to the State of Montana's website, background checks range between $10-$30.  Currently, all business licenses cost $55 annually.  This enhanced business license will not generate more money for the city.  The $30 discount for fiscal year 2022 will likely reduce business license revenues by ~$2,500 (83 massage businesses x $30).