Matrix Consulting Group 1
1650 S Amphlett Blvd., Suite 213
San Mateo, CA 94402
650.858.0507
January 26, 2023
SUBJECT: ANNUAL FEE UPDATE RECOMMENDATION
The City of Commerce contracted with the Matrix Consulting Group in 2020 to conduct a Small Wireless Facilities Application Fee Study. This study developed and calculated application fees for small wireless facilities that are located in the public right-of-way.
Though the results of this study were adopted by council and implemented at full cost recovery in 2020, these fees have not been increased since initial adoption. Given general labor and supply cost increases over the past two years, the current fees being charged by the City are no longer at full cost recovery.
Conducting a comprehensive analysis of fee-related services and costs annually would be quite cumbersome and costly, even if only for a handful of fees. The general rule of thumb for comprehensive fee analyses is between three and five years, as this allows jurisdictions to ensure they account for organizational changes such as staffing and merit increases, process efficiencies, code or rule changes, or technology improvements.
Developing annual update mechanisms allow jurisdictions to maintain current levels of cost recovery, while accounting for increases in staffing or expenditures related to permit services. The most common method of increasing fees or cost is to look at regional cost indicators, such as the Consumer Price Index. These factors are calculated by the Bureau of Labor Statistics, put out at various intervals within a year, and are specific to states and regions. These percentages can vary and can be positive or negative.
When choosing a CPI factor, the City should outline which CPI should be used, including specific region, and adoption date. If CPI factors are negative, the City should not make fee increases or decreases.
Recommendation: The City of Commerce should apply a CPI factor annually to help maintain cost recovery levels. The City should use the Los Angeles area Urban CPI factor published in March to ensure consistent CPI application. If the CPI exceeds 4%, then the Cost of Living Adjustment (COLA) for City staff should be utilized to increase fees. If the CPI is negative fees should not be changed. This will ensure that fees are increased to maintain the original established cost recovery target. matrix
consulting group
EXHIBIT D