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RELEVANT LINKS: League of Minnesota Cities Information Memo: 1/4/2016 Regulating Peddlers, Solicitors and Transient Merchants Page 21 D.Fees Watters v. People of State of Michigan, 248 U.S. 65, 39 S. Ct. 29 (1918). Northeast Ohio Coalition for the Homeless v. City of Cleveland, 105 F.3d 1107 (6th Cir. 1997). Whenever a city requires a license, it may also require a license fee. A license fee imposed on all peddlers (regardless of the source and nature of the products they peddle) can be a content neutral, constitutionally permissible time, place, and manner regulation as long as the purpose of charging the fee is limited to defraying the expenses incurred for regulating the activity. Watchtower Bible & Tract Soc’y of New York, Inc. v. Village of Stratton, 536 U.S. 150, 122 S. Ct. 2080 (2002). While permit or license fees probably cannot be charged for commercial and non-commercial door-to-door solicitors, cities may charge a fee to most peddlers and transient merchants. Cities often utilize a fee schedule to establish the fees for all city-issued licenses. By removing specific dollar amounts from specific ordinances and referencing a fee schedule, the city can pass one ordinance adopting the new fee schedule each time it changes a fee. See “Setting Municipal Fees,” Minnesota Cities (Apr. 2004, p. 19). Orr v. City of Rochester, 193 Minn. 371, 258 N.W. 569 (1935). State v. Redmond, 43 Minn. 250, 45 N.W. 232 (1890). Licensing should not be viewed as a significant source of revenue. A license fee should approximate the direct and indirect costs associated with issuing the license and policing the licensed activities. License fees that significantly exceed city costs are generally considered to be taxes the city does not have the authority to enact. A license fee may not be so high as to produce any substantial revenue beyond what it actually costs to issue the license and to supervise, inspect, and regulate the licensed business. Establishing licensing fees by simply comparing fees imposed by other cities can be problematic. The reasonable character of a particular fee depends on the kind of business, the amount of inspection and regulation, the current value of the dollar, and other inherently local factors—all of which can vary greatly by location. If the city fee is large enough to cover more than the cost of issuing the license and all city licenses expire on the same day, it may want to consider providing a pro rata fee system for those who get or give up licenses during the year. E.Bonds A bond is similar to an insurance policy. If a merchant fails to comply with city regulations or uphold his or her guarantees, an injured party may be entitled to recover funds secured by the bond. The benefit of requiring the posting of a bond before door-to-door or transient operations are allowed may appear obvious in theory, but is more problematic in practice.