Title
Public Hearing to Consider Adoption of Resolution to Amend Master Fee Resolution No. 12191 to Revise the Fee Schedules for the Alameda Recreation and Parks Department, Planning, Building and Transportation Department, Public Works Department, Finance Department, and the Fire Department. [City Council] (Finance 10024051)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The Fiscal Year (FY) 2024-25 Master Fee Schedule (MFS) documents the fees and charges for City of Alameda (City) services that are revenue to the City’s General Fund and other special revenue funds. A full review of City fees is conducted every five years. Fees are then adjusted annually based on the Consumer Price Index (CPI) as part of the budget cycle. The fees proposed in the MFS are assumed in the revenue estimates in the proposed FY 2024-25 Midcycle Operating Budget.
The City contracted with NBS Government Finance Group, Inc. (NBS) to conduct a detailed cost of services study of user fee activities (“fee study”) for the Planning, Building and Transportation Department (PBT), Public Works Department, and the Fire Department. NBS also conducted a high-level review of the Recreation and Parks Department (ARPD) fees and concluded that the annual review process of these fees, comparing them to appropriate agencies and assessing actual costs, aligned with best practices. The primary purpose of conducting this study was to ensure that fees are reasonable and equitable, and do not exceed the costs of service provided, as required under Proposition 26. This study provides an opportunity for the City to adjust fees and better align them with the adopted cost recovery policies, which supports the City’s Strategic Plan Priority to Practice Fiscally Responsible, Equitable, & Inclusive Government. This five-year review is significant given the fact that rising wages and fully loaded personnel costs, as well as service and supply increases, have a direct impact on the fee structure and need to be regularly assessed for full cost recovery.
It is important to note that fees are imposed for a service in which the individual receives a direct, personal benefit. In most cases, the person or company chooses to receive a service, and thus, when feasible, the fee should be set at a rate to fully recover the cost of providing that service. The fee study (Exhibit 1) confirmed which current fees are inadequate and fail to capture the actual costs of the services provided. In response, City Departments recommend that certain fees be adjusted to ensure improved cost recovery for such services in order to protect the health of the General Fund and other special funds. It is also important to note that the General Fund by design supplements the cost of services in community benefiting departments such as Recreation and Parks and Library services. Thus, it is important to ensure the collection of cost covering services in other areas.
The recommended MFS includes a number of changes for efficiency and transparency, and in some instances, limited fees to below 100% cost recovery if they provide a broader public benefit supporting the City’s priorities and goals. The Fire Department (AFD) recommends revising AFD fire inspection, ambulance billing and other fees while continuing to offer ambulance fee reductions or waivers for those experiencing financial hardship (Exhibit 5). The Planning, Building, and Transportation Department (PBT) has undertaken a major restructuring of its fee schedule to simplify Building Permit fees. PBT also recommends keeping specific permit fees below 100% cost recovery to support the City Strategic Plan priority to Build Resilience to Climate Change & Water Level Rise, such as encouraging the shift from gas to electric appliances. Parking fines and code enforcement fees are also being updated according to City policies and to meet legal considerations recommended by the City Attorney. To increase transparency, the Public Works Department is eliminating fees that are no longer in use, updating and reorganizing their fees, and recommending certain fees below 100% cost recovery that provide public benefit such as residential encroachment permits and no parking signs. The Finance Department recommends combining the business license renewal fees into one flat fee and adding two new services with appropriate administrative fees to help recover these newly added costs. ARPD is increasing semi-private and private swim lesson fees to cover increasing costs and reviewed these fees to ensure they are comparable within Alameda and with other cities.
Staff recommends the City Council adopt the proposed Master Fee Schedule for the 2024-25 fiscal year.
BACKGROUND
California cities are permitted by State law to impose user fees for services and regulatory activities they provide. User fee activities are those services and functions the city provides to individuals who receive a direct or personal material benefit from the services, while regulatory fees are those imposed to recover costs associated with the City's power to govern certain activities such as development and construction. Pursuant to State law, fees may not exceed the estimated and reasonable cost of providing the service or performing the activity.
The City contracted with NBS, Inc. to conduct a detailed cost of services study of user fee activities for the Planning, Building, and Transportation, Public Works, and Fire Departments to ensure that fees are aligned with the cost of providing the services. Industry best practices recommend cities perform a comprehensive cost of service study every three to five years. The last such fee study was conducted in 2019. This fee study is of particular importance given the City’s decision to withhold fee increases for a two-year period between July 2020 through June 2022 during the COVID-19 pandemic. While fee levels remained flat for this period, the cost of providing services continued to rise. The study also reviewed the fees for ARPD and how those fees are analyzed and assessed for recommendation to City Council. NBS confirmed these fees are consistent with standard fees statewide, but the study did not perform an analysis of individual program fees as it is atypical for recreation services to be 100% cost recovery due to the beneficial nature to the greater community and desire to keep these fees affordable. The fee differential for ARPD is offset by the General Fund which aligns with City Council’s Strategic Priority to Enhance Community Safety & Services.
For Fiscal Year (FY) 2022-23, City Council approved a fee increase of 5% based on a CPI of 5.2% (Exhibit 3). Based on Resolution No. 12191, the eligible fees in the MFS would be increased in accordance with the percentage change in the CPI. However, pursuant to Ordinance No. 1928, as referenced in Resolution No. 12191 and Resolution No. 14027, City fees are subject to administrative adjustments not greater than 5% annually. Therefore, eligible fees in all departments in the MFS were increased by 5%.
Given all of these factors that impact and slow fee increases, this in-depth five-year MFS review and recommended fee adjustments are intended to re-align the City’s fees to 100% cost recovery.
The primary goals and objectives of the MFS were to:
• Simplify fee schedules to make them easier to implement and understand.
• Identify a connection between fees and the cost of services provided.
• Ensure the fees are logical and legally defensible.
• Provide accurate revenue projections based on the full recovery of City costs.
• Compare fee activities to surrounding communities as a gauge of the local market for similar activities.
Community Outreach
For the first time, public outreach was conducted on the master fee schedule. PBT led the effort and gave a presentation to local realtors in January 2024 and the business community (DABA, WABA, Chamber of Commerce) in February 2024. In May 2024, PBT had additional discussions with the DABA Outreach Committee. The realtors and businesses expressed that they understood fee increases and had no concerns. They were primarily interested with the efficient and collaborative processes being implemented. Staff also informed local developers about the potential for upcoming fee increases.
DISCUSSION
Scope of Study and Methodology
The NBS study examined all development-related fee categories administered by the Planning, Building and Transportation, Public Works, and Fire Departments, as follows:
• Planning and Building services, including development plan review, zoning compliance review, building plan check and inspection, and other planning and building activities.
• Public Works services, including engineering plan review, encroachment permits, subdivision map review, and other engineering inspections and activities.
• Fire services, including fire inspections and fire plan check reviews.
The study included a cost-of-service analysis (Exhibit 1, Appendix A), which evaluated direct and indirect labor costs, allocable non-labor costs, and citywide overhead, to derive a fully burdened labor rate for each department. Organizational and service time analyses were performed for each activity, followed by a cost recovery analysis, which compared the existing fee for each service, or activity, to the average full cost to provide the service. The final step was to establish fees based on the full cost of service and cost recovery targets.
Planning, Building and Transportation Department
In 2009, the City created a Special Revenue Fund for the Planning and Building services, which is now housed in PBT. This Special Revenue Fund is funded exclusively by fees collected for the City’s provision of land use planning, code enforcement and building permit services. It is based on a business model designed to generate revenue that supports the cost of providing services, without any assistance from the General Fund, except for Code Enforcement which is further described below.
The scope of the study focuses on the Special Revenue Fund and does not include funds supporting the Transportation Planning and the Sustainability and Resiliency divisions of PBT. This is because these City functions do not charge user fees.
This study provides a rational basis for fees that are sufficient to cover operational expenses needed to respond to development-related activities. It also aims to continue providing a high level of customer service in all Planning and Building permit activities.
Planning Division
Based on the analysis of the Planning Division activities, no major fee changes to the fee structure are recommended. Staff recommends the City continue to use flat fees for many simple day-to-day approvals, while continuing to charge time and materials in cases where there is a significant fluctuation in staff time spent. This approach ensures that all customers pay their fair share and small projects are not overburdened with excessive fees. Some fees are proposed to be deleted where they are no longer used due to changes in state law, while other fees were modified to create more specific tiers to reflect actual cost of service. Otherwise, significant emphasis was placed on assuring that Planning fees are coordinated with current and proposed Public Works and Building permit fees so there is no duplication of fees or conflicts in review processes. This is particularly important in large-scale developments where early coordination between Planning and other departments is critical to the success of a project. All Planning Division fees are recommended to be 100% cost recovery.
Building Division
The Building Division recently reorganized building permit fees to better align with current practices and the services provided during plan reviews. This reorganization was driven by process improvements made during the COVID-19 pandemic, specifically the transition from paper-based plan checks to electronic plan reviews, which resulted in increased efficiency. The proposed changes to the fee structure for plan checks, inspections, and permits aim to achieve several goals. First, the fee calculation process has been simplified. Second, fees are now better aligned with project sizes and complexity. Lastly, the fee structure has been streamlined by consolidating categories and removing unnecessary granularity of individual fees. The main modifications to building permit fees include:
• Consolidation of Permit Fee Tiers: The building code prescribes a framework for permit fee calculation based on square footage and occupancy tiers for local jurisdictions to adopt permit fees on new construction, additions, and major remodel activities. Staff proposes streamlining the fee structure from five tiers to three tiers per occupancy classification. This adjustment ensures that the fee structure aligns with current and anticipated project sizes while simplifying fee calculation.
• Express (Same Day) Permits: Staff recommends restructuring the list of miscellaneous fixed-fee permits to include only the most common categories. This change supports PBT’s goal of expanding “Express Permits” (same-day online permitting) for routine property improvements. Projects not covered by fixed fees will be charged based on occupancy classification and square footage described above.
• Affordable Fees for Climate Goals: Staff recommends keeping certain mechanical, electrical, and plumbing permit fees to 25% below cost recovery to promote home upgrades that further the City’s Climate Action and Resiliency Plan (CARP) goals and the Strategic Plan Priority to Build Resilience to Climate Change & Water Level Rise. Some of the following fee reductions can be combined with rebates offered by Alameda Municipal Power to provide significant savings for the Alameda community. Specifically, staff recommends keeping the following fees affordable to advance City climate and sustainability goals:
o Heat Pump/Heat Pump Water Heater (support switch from gas to electric)
o EV Chargers (promote EV use)
o Electrical Service Upgrades (to support the above)
o Gas Shut Off Valves (to minimize fire threat during earthquakes)
Based on the average number of permits received in past years, staff estimates the cost to subsidize these permits will equal $50,000 to $60,000 annually, which could be absorbed by the Planning and Building Fund fund balance. Staff will monitor the cost of this subsidy and recommend any necessary changes as part of the annual Master Fee Schedule update to the City Council.
The fee study also lists fees for solar permits and wireless service antennas below cost recovery per the fee limits imposed by state and federal regulations.
Code Enforcement Division
The Code Enforcement Division currently recovers 75% of the cost of providing enforcement services through an Investigative Fee, which is four times the permit/activity fee. The remaining 25% of the Division's expenditures are funded by the General Fund for non-construction related violations, such as leaf blowers, noise, property maintenance, signage, and other zoning code and permit condition violations.
Despite many cities in California having a multiplier investigative fee for work-without-permit violations, the City Attorney has advised that there is an increasing risk to the City for applying an across-the-board 4x multiplier fee based on recent court decisions. At the recommendation of the City Attorney, the NBS study analyzed a different fee structure based on staff time rather than a standard 4x multiplier Investigative Fee. Under the proposed structure, Code Enforcement activities will be billed to the responsible property owner based on actual staff time, followed by a collections process for any unpaid debt.
It is important to note that the proposed staff-hour billing method is more suitable for work-without-permit violations, as the Investigative Fee may be collected when an individual applies for a permit to correct the code violation. However, for non-construction related violations, it is challenging to recover the cost from violators for Code Enforcement staff time. Moreover, administrative penalties limited at $250, $500, and $1,000, as required under the Alameda Municipal Code (AMC) per state law will unlikely cover the entire cost of code enforcement staff time. Therefore, many cities fund non-permit related code enforcement activity through the General Fund. Greater enforcement of non-construction related violations will require more General Fund resources for Code Enforcement. Staff will be monitoring costs under the new staff-hour billing method and recommend adjustments as part of future budget actions.
Special Events Permit Fees
Special events encompass organized activities that utilize streets, parks, or other public spaces for public gatherings. These events include festivals, parades, races, filming, and related activities that often necessitate street closures. While the administration of special events was not within the scope of the NBS study, an interdepartmental staff group conducted an internal review of the application process and staff costs. The fees associated with Special Events serve to cover administrative expenses by the City and ensure that events are organized safely and efficiently.
The Special Event Permit fee accounts for City staff time across multiple departments, as they review event proposals. The current MFS specifies a flat permit fee of $750, which has remained unchanged for many years and does not account for staff time required for a wide variety of event sizes and scopes. Traditionally, City Council waived these permit fees for non-profit organizations, with the cost of staff review and support for non-profit special events absorbed by the respective departments. For special events requiring staffing support (including Police, Fire, Public Works, and Building Inspections), costs include not only permit review time but also overtime pay for Public Works, Police, and Fire staff, as most events occur outside regular City business hours. Additionally, larger events necessitating street closures incur expenses related to third-party traffic control plan reviews. Staff refers to these costs as “Additional Services” associated with the Special Event Permit.
To offset the Additional Services costs for the departments, in FY 2023-24, City Council approved a $200,000 grant fund to for non-profit special events to offset their costs. Rather than requiring non-profit organizations to pay directly, the fund reimburses the departments for their staffing costs related to providing Additional Services. The first round of grant funds has been successfully allocated and the proposed FY 2024-25 budget includes a continuation of this grant program.
Currently, staff proposes an update to the Special Event permit fees to accurately reflect the City’s costs for reviewing applications and providing Additional Services for various types of special events. The Special Event Permit application fee now consists of a minimum and maximum fee range for minor and major event types, offering transparency regarding the actual cost of the City’s review and potential staffing for Additional Services during special events. All Special Event permit fees are billed on an actual time basis. The MFS stipulates that Special Event permit fees are waived for non-profit organizations. The organizations may also apply for grant funds to cover the Additional Services costs, pending City Council’s approval of these funds in the proposed FY 2024-25 budget.
Public Works and Engineering
Public Works/Engineering fees currently recover only 38% of costs. Keeping in mind the City's interest in cost recovery with applicants' expectations, staff proposes fees generally be increased to be at 100% cost recovery except for the residential encroachment permit and no parking sign processing fees. Cost recovery for these is recommended at 13% and 0.15%, respectively. Lower cost recovery is recommended for these fee items to increase the rate of permit issuance and compliance with City Standards during construction. The fee study bases most engineering fees on a fully burdened rate of $234 per hour, assuming 100% cost recovery. This represents an increase of 16% from the engineering hourly rate in the Master Fee Schedule, effective July 2022. This hourly rate is similar to the $236 per hour charged by the City of Walnut Creek for Public Works/Engineering services, a comparable city.
The proposed fee structure deletes fees that are no longer needed while organizing existing ones and adding new fees. Some of these additions were simply identification of existing services or activities performed by City staff for which no fee is currently charged. A number of Public Works fees were expanded to further categorize different activities requiring varying amounts of staff review and inspection time. For instance, right of way encroachment permits may range from a simple residential sidewalk repair to a complicated utility relocation project occurring at multiple locations throughout the City. Clarity was also provided to let fee users know that Public Works activities contracted out to consulting firms are to be cost recovered at actual direct costs. Additional fees are proposed for Public Works review of improvements in the floodplain. The parklet fee, previously approved by City Council in 2023, is incorporated into this fee schedule.
Public Works took responsibility for parking enforcement from the Alameda Police Department. Although parking violation fine amounts and associated late payment penalties are not user fees, they are charges, and the California Vehicle Code requires they be established by the governing body of the jurisdiction where the notice of violation is issued. The majority of parking violation fines remain unchanged from past years. Of those increased, six are safety related violations including parking on a sidewalk, in a bus zone, an intersection, a crosswalk, a safety zone or within 15 feet of a fire station driveway. In addition, a handful of violations that were previously omitted from previous schedules are now included and shown as new although the code provisions are not new.
Fire Department
The Fire Prevention Bureau is responsible for reviewing, updating, and enforcing fire-related codes and ordinances. Activities include consultation and review of new construction projects to ensure plans comply with fire and life safety specifications required by City and State fire codes. In addition to new construction projects, the Fire Prevention Bureau also performs life safety inspections of different occupancies throughout the City. Inspection criteria are established by City and State statutes and fire codes designed to protect the public's safety.
Fees typically associated with new construction are recommended at 100% cost recovery. False Alarm fees are recommended to be increased by 5% based on the CPI percentage change.
The analysis of the Fire Prevention Bureau indicates fees charged for new construction and occupancy inspections are not adequate to capture the actual costs of the services provided. Life safety inspections in existing occupancies are an important public benefit and it is recommended that the fees for these types of services continue to be collected at less than 100% recovery. Fees for annual and bi-annual inspections are set at 55% cost recovery with the following exceptions.
• Inspections for businesses are set at 29% cost recovery in order to not burden the local business community. Larger businesses would likely require additional time, which is set at 55% cost recovery.
• Inspections for small residential units are set at 30% for 3-10 units and 40% for 11-20 units to minimize the impact on small unit count landlords.
• Inspections for larger residential buildings are charged 100% cost recovery for units above 21 or more.
These lower fee recovery percentages are to support our local businesses and landlords as well as allow for a gradual phased increase over several years for property owners. The Fire Department's goal is to reach 100% fee recovery for all fee-related work over the next 5-7 years.
The Alameda County Board of Supervisors approves user fees for the Alameda County Emergency Medical Services (EMS) Agency and these set the standard for the EMS fees for cities within Alameda County who are the County’s contracted 9-1-1 ambulance transport service providers. Under the terms of the City’s current Emergency Medical Service Ambulance Transport Agreement, Section 10.2, the City may increase its user fees to remain equivalent to the County’s Contracted Provider rates. The EMS Agency’s Updated City’s User Fees - 911 system (Exhibit 4) reflects the approved rates effective July 1, 2023. These fees are recovered from Medicare, Medi-Cal, Insurance, and private payors, if they are not insured or if insurance does not cover the full cost. Table 1 shows the breakdown of EMS billing between the four payor types. Medicare, Medi-Cal and Insurance cover 95.7% of EMS bills. The remaining 4.3%, estimated annually at $14,887, is billed to private payors. All EMS billing is coordinated through a third-party vendor.
|
Payer |
Percentage |
Explanation |
|
Medicare |
56.9% |
Will not pay any new revenue due to cap on allowable reimbursement |
|
Medi-Cal |
23.1% |
Will not pay any new revenue due to cap on allowable reimbursement |
|
Insurance |
15.7% |
Will pay 75% of new charges or approx. $815,372 in new payments |
|
Private Pay |
4.3% |
Will pay 5% of new charges or approx. $14,887 |
|
Total |
100% |
|
Allocation of EMS Billing - Table 1
Any private payor that is unable to pay all or some of the bill may receive a hardship waiver, as further described in the EMS Billing Policy (Exhibit 5). If individuals are unable to cover the associated cost of medical care by AFD they are referred to the AFD by the billing vendor to obtain a financial hardship application. AFD recently reviewed and revised its Financial Hardship policy to simplify the process and be consistent with other local fire agencies that provide medical transport services. Through the policy, AFD will review and approve requests that are consistent and equitable, by using the Department of Health and Human Services Poverty Guidelines to determine the percentage of reduction or if a full fee waiver is appropriate.
In addition to the approved county-wide EMS fees, AFD charges a First Responder Fee. This fee was calculated by a separate fee study analysis in 2019 which included the cost recovery fee for an Advanced Life Support (ALS) apparatus response. This fee was adopted by City Council on March 5, 2019.
This fee covers the total time needed to complete an EMS call, including response time, mitigation, clean-up, return to the station, and restocking of the apparatus for supplies. The First Responder fee is used to help offset the cost of providing ALS services to the community. These fees are billed to individuals utilizing services as compared to cities that have adopted a parcel tax to offset ALS services.
The fee amount was determined using a three- and five-year time and response study. The fee was calculated in 2019 at $388. The First Responder fee currently is $413 and AFD is not requesting to increase this fee. Staff recently determined that the EMS billing company is only assessing $393 for this fee. If approved by City Council, the actual recovery of the fee will be raised to $413. This fee is covered in part or all by insurance and is included under the hardship policy to apply for a fee waiver or reduction.
It is the policy of AFD to provide EMS services at no cost to the patient when the following conditions are met:
• Patient assist without need for medical services (e.g. assistance getting back into bed).
• Patient or designee, did not call for service (e.g. friend or neighbor called) and patient refuses medical care.
• DOD - at no time will the family of the deceased patient be responsible for an unpaid remaining balance after the insurance carrier has paid or denied a claim.
• Law enforcement requested treatment or transport for victims of violent crime.
|
Agency |
Base Rate |
Mileage |
Oxygen |
Treatment Non-Transport |
|
|
Alameda County EMS Agency City's User Fees (eff. 7/1/23) |
$3,664.87 |
$82.69 |
$273.79 |
$735.01 |
|
|
Falck |
$3,664.87 |
$82.69 |
$273.79 |
$735.01 |
|
|
Albany Fire Department |
$3,664.87 |
$82.69 |
$273.79 |
$735.01 |
|
|
Berkeley Fire Department |
$3,664.87 |
$82.69 |
$273.79 |
$735.01 |
|
|
Piedmont Fire Department |
$3,331.40 |
$75.17 |
$248.88 |
$668.13 |
|
|
Alameda Fire Department |
|
|
|
|
|
|
Current Fees |
$2,295.00 |
$51.78 |
$171.45 |
$460.27 |
|
|
Proposed Fees |
$3,664.87 |
$82.69 |
$273.79 |
$735.01 |
|
Finance Department
The Finance Department determined some department fees that must be adjusted to account for the increased costs of doing business due to economic inflation. The recommendation is to combine application/renewal fees into one flat fee of $27. With the advancement of technology, the online renewal system is no longer a luxury, but in fact, essential. By combining these fees, it will ensure the public continues to enjoy the convenience and innovations of online web payments.
The Finance Department also proposes adding the following two new administrative fees that are standard practice in most cities.
For businesses or taxpayers who fall behind due to financial hardship, assistance will be available through a payment plan. An “administrative fee” of $50 would apply to help offset costs associated with this payment plan.
For businesses who do not attempt to contact the City, the City will pursue legal action within the limits of the AMC and assess a “Collection fee” of $50. This fee would cover costs associated with the resources spent pursuing legal action.
These new processes would provide the community payment options and would deter any uncollected debts from lingering and potentially being lost.
How Proposed Fees Compare with Other Cities
NBS worked with the City to choose five comparative agencies: Berkeley, Fremont, Hayward, San Leandro, and Walnut Creek. These five cities have been traditionally used as a benchmark due to their location, similarities in regulation, size, and services provided. The following should be noted about the general approach to using comparative survey data:
Although comparative surveys do not provide information about the cost recovery policies or procedures inherent in each comparison agency, it does help us determine what the local market looks like. A “market-based” decision to price services below the full cost of service calculation is equivalent to subsidizing that service.
Comparative agencies may or may not base their fee amounts on the estimated and reasonable cost of providing services. NBS did not perform the same level of analysis provided for this study on the comparative agencies’ fees which are often non-conclusive in many fee categories and the terminology used varies for the provision of similar services. Additionally, these cities have not completed recent fee studies within the last five years, and staff believes their fees will be increased correspondingly once a study of their fees is performed.
Due to these facts, an apples-to-apples comparison is not available. Appendix B (Exhibit 1) presents the comparative fee survey in full detail. The purpose of this comparison is to provide a sense of the local market pricing for services and to use that information to gauge the impact of recommendations for fee adjustments.
The Fee Study found approximately 143 fee items that may be compared with other agencies. Among these fees, Alameda's proposed fee schedule had 29% of the fees as the highest among the comparison cities, 54% of the fees in the middle range, and 11% of the fees as the lowest compared to other cities.
Staff has reviewed the proposed changes to the fee schedule and concludes the fees and charges are (a) imposed for a specific benefit conferred directly to the payor that is not provided to those not charged and does not exceed the reasonable cost to the local government of conferring the benefit, (b) imposed for a specific government service or product provided directly to the payor that is not provided to those not charged and which does not exceed the reasonable costs of the local government of providing such service or product, (c) imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, and the administrative enforcement and adjudication thereof, and/or (d) imposed as a condition of property development.
As explained in the staff report and as set forth in detail in the MFS prepared by NBS, the proposed fees are recommended as reasonable and fiscally responsible and there is ample evidence that the fees and charges are not “taxes”. The amount of the fees and charges are no more than necessary to cover the cost of the governmental activity (and indeed, in some cases, the fees and charges that the City proposes to impose are less than the reasonable cost that the City incurs to provide the services) and the manner in which the costs are allocated to a payor bears a reasonable relationship to the payor’s burden on, or benefits received from, the governmental activity.
ALTERNATIVES
• Adopt the proposed MFS. This would ensure City fees stay on par with the current market allowing the City to absorb the impact of inflation and rising costs while continuing to provide essential services to our community.
• Adopt the proposed MFS phasing in the proposed increases over the next three years. This would smooth the impact such increases would have on the community. However, deferring departments' cost recovery will negatively impact the services offered to the public due to reduced funding for staff and resources, and lead to budget reductions or require additional funding from the General Fund to offset the cost of providing services.
• Adjust specific fees when adopting the MFS. Any fee reductions would impact the FY 2024-25 budget as proposed and described above.
FINANCIAL IMPACT
Adopting the new fee schedule allows for full cost recovery of planning and building activities. PBT is a special revenue fund department and receives no General Fund revenue. While specific Public Works fees and most AFD fees do not cover 100% of their costs, the amounts they do collect reduce the impact on the General Fund and other Funds.
The NBS User Fee Study identified approximately $6.5 million currently collected from fees for service, versus $11.3 million eligible for recovery from fees for services and is recommending fees estimated to generate an additional $5.38 million. (Exhibit 1, Section 1.1)
|
|
Annual Estimated Revenues at Current Fee |
Annual Estimated Revenues at Full Cost Recovery |
Annual Estimated at Recommended Cost Recovery |
|
Planning |
$760,474 |
$961,377 |
$961,377 |
|
Building |
$3,899,663 |
$5,442,141 |
$5,372,220 |
|
Code Enforcement |
$330,442 |
$479,789 |
$382,821 |
|
Public Works |
$710,378 |
$1,866,125 |
$1,861,439 |
|
Fire Prevention |
$779,001 |
$2,573,119 |
$1,318,781 |
|
Fire EMS Fees |
$3,904,401 |
$5,866,193 |
$5,866,193 |
|
Totals |
$10,384,359 |
$17,188,744 |
$15,762,831 |
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
All other sections of the AMC dealing with this subject matter have been thoroughly analyzed and found to be compatible with the proposed amendment to the AMC. This action is consistent with the Strategic Plan action to Practice Fiscally Responsible, Equitable & Inclusive Governance.
CLIMATE IMPACT
There are no climate impacts from revising the Master Fee Schedule. The proposed fee schedule includes keeping certain permit fees related to electrification affordable to further CARP goals.
ENVIRONMENTAL REVIEW
Adoption of a revised fee schedule is a governmental fiscal function and not subject to environmental review in that it is not a "project" as defined by CEQA. Pursuant to CEQA Guidelines section 15378(b)(4), a "project" does not include the creation of governmental funding mechanisms or other governmental fiscal activities which do not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment.
RECOMMENDATION
Adopt a resolution to amend Master Fee Resolution No. 12191 to revise the Planning, Building, and Transportation Department, Public Works Department, Fire Department, and Finance Department fee schedules.
Respectfully submitted,
Jennifer Ott, City Manager
By,
Carlos Figueroa, Senior Financial Analyst
Allen Tai, Planning, Building, and Transportation Director
Erin Smith, Public Works Director
Nicholas Luby, Fire Chief
Justin Long, Recreation and Parks Director
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. User Fees and Charges Study
2. Proposed 2024-2025 Master Fee Schedule
3. Current 2022-2023 Master Fee Schedule
4. Alameda County EMS Agency Updated User Fees
5. AFD Financial Hardship Policy for EMS Fees