City User and Regulatory Fees Update
Presented ByPresented By
Kevin BiersackKevin Biersack
Financial ServicesFinancial Services
08/09/202308/09/2023
City User and Regulatory Fees
Ø Spring/Summer 2021 Comprehensive Cost of Service Study Ø September 8, 2021 Schedule of User and Regulatory Fees Updated, Resolution CC 2021-27
• Fee Study Report, comprised of:
o Cost of Service Model
o Cost Allocation Model
o Master Fee Schedule
Ø December 1, 2021 Updated Fees Implemented
City User and Regulatory Fees
Ø Examples of user and regulatory fees collected by Cathedral City and municipalities throughout California include, but are not limited to:
• Planning Fees, such as entitlement review and review for compliance with the zoning code
• Building Fees, such as permitting of new construction or modifications to existing structures
• Engineering Fees, such as map review, encroachment permitting, and public improvement review
• Fire Prevention Fees, such as fire sprinkler, fire alarm, and other permit review for compliance with Fire Code
• Police Fees, such as vehicle impound and false alarm response
City User and Regulatory Fees
User and regulatory fees specifically exclude:
• Taxes
• Assessments
• Franchise Fees
• Development Impact Fees
• Fines or Penalties
• Utility Rates and Services Charges
City User and Regulatory Fees
Identify fees effective FY 2023/2024, based on City
Council’s directive and the Resolution 2021-27 to adjust fees based on the:
• change in regional cost inflation, or
• based on Council directed phase-in to full cost
recovery for various fees.
City User and Regulatory Fees - CPI
• During interim years, i.e., during years in between
comprehensive fee studies, the City Council authorized
inflationary adjustments to fees.
• Inflationary adjustments are based on the percentage
change for the 12-months ending March of the fiscal year, i.e., 2022/2023 in the Consumer Price Index (CPI) for All Urban Consumers, Riverside-San Bernardino-Ontario, CA
• CPI as of March 2023 is 4.57%
City User and Regulatory Fees – Phase-In
• In addition to the CPI update, City Council authorized in Resolution 2021-27 a multi-year phase-in approach to enhance cost recovery for several fees. The multi-year phase-in pattern is illustrated below:
o Current fees at 85% cost recovery
o Adjustment for FY 2023/2024: Adjust fees to 92.5% cost recovery
o Adjustment for FY 2024/2025: Adjust fees to 100% cost recovery
City User and Regulatory Fees
This update is comprised of:
• Attachment 1 – Fee Schedule Update
• Attachment 2 – Before and After Fee Schedule
(changes highlighted in red)
• Attachment 3 – Cost of Service
City User and Regulatory Fees
• Primary Rationale for non-CPI changes: To more easily forecast applicable fees, identifying these fee categories in the City’s schedule will reduce variability in billings
• Supports the City’s Strategic Plan, Goal C: Fiscal Stability and Sustainability • These adjustments were originally noticed in CC Resolution 2021-27 • The Public Hearing was advertised/noticed in our local newspaper on July 19, 2023 and July 26, 2023
City User and Regulatory Fees
• Before and After Refinements
o Inspection Fees
o Building
o Code Compliance
o Engineering Land Development & Encroachment
o Fire Prevention
o Planning
o Police
o Short-Term Rental
City User and Regulatory Fees
Potential Fiscal Impact
• Assuming level activity, License, Permit, and Fees @ 4.57% CPI could increase revenue up to $360,000
• Some revenues are not applicable to the CPI, e.g., business license tax portion • For this fiscal year, the estimated impact should be approximately $250,000
City User and Regulatory Fees
• New Fees & Refinements
o August 2023 City Council Review and Approval
o October 2023 60-day Ratification
o November 1, 2023 Implementation/Effective Date
City User and Regulatory Fees
Future Dates
• CPI as of March 2024 should result in a July 1, 2024
effective date
• Engaging Clearsource for a Fee Study update during
FY 2024/2025 should provide a new Fee Study
effective July 1, 2025 (FY 2025/2026)
THE END