Redondo Beach : Doctor Business Fee Revived

After a three-month reprieve precipitated by complaints from doctors, city officials once again will require out-of-town physicians who perform medical services at South Bay Hospital to buy business licenses.

The City Council voted unanimously Tuesday to reinstate the controversial practice, which was suspended in late December after several doctors complained about the charge and some council members raised legal concerns about it.

The council directed City Manager Tim Casey to draft a letter to the physicians explaining why the license is required and to inform hospital officials about the letter and license applications before mailing them to the 503 physicians on the hospital’s roster.

The city’s License and Collections Department had mailed 103 business license applications to physicians before the practice was discontinued. The new applications will be mailed within a month, Casey said.

The city regularly collects fees from other professionals and business people who operate in Redondo Beach but whose businesses are located elsewhere, including general contractors, engineers, caterers and gardeners, Casey said. The city’s intention, he said, is to ensure that the ordinance is equally enforced for doctors.

City Atty. Gordon Phillips submitted an opinion to the council that imposition of a business license on doctors is legal and enforceable.

A business license costs $73.50 for doctors and other professionals, with an additional $13 for each employee who works in the city. The rate applies for all physicians, regardless of how much work they perform in the city.

Other cities, including Los Angeles, base the fee on a percentage of gross receipts collected in the city by the business or individual.

Casey said some doctors reacted with surprise to the mailing because for many years, when the hospital was considered a public agency run by the South Bay Hospital District, they were exempt from city taxes. Last year the district leased the hospital to American Medical International, a private corporation, making it a for-profit business that is taxed by the city. It is the only hospital in the city.

According to City Treasurer Alice DeLong, 30 of the original 103 applications sent to doctors were returned without payment because the physicians said they do not treat patients at South Bay Hospital. Six doctors sent letters requesting more information about the license and eight called the city to complain, DeLong said. No one paid the fee.