Agenda Report
Fullerton City Council
MEETING DATE: MAY 2, 2023
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: Eric Levitt, City manager
PREPARED BY: ADAM LOESER, FIRE CHIEF
Jon Fugitt, Deputy Chief Administration/Fire Marshal
Mario Espindola, Interim SENIOR Administrative Analyst
SUBJECT: NEW AND REVISED FIRE DEPARTMENT SERVICES FEES
SUMMARY
Consideration of adding, increasing and/or modifying Fire Department fees beginning Fiscal Year (FY) 2023-2024 for services provided by the Fire Department to approach cost recovery for public safety programs and services.
RECOMMENDATION
Direct staff to submit proposed fee changes, as recommended by the Fire fee study, to the Fire Department Fee Schedule to approach full cost recovery over a three-year period beginning Fiscal Year 2023-24 for approval at a June 6, 2023 Public Hearing.
Direct staff to submit the proposed new Fire Department fees, as recommended by the Fire fee study, at full cost recovery rate for Fire services currently provided by the department and not recovered starting FY 2023-24 for approval at a June 6, 2023 Public Hearing.
CITY MANAGER REMARKS
There are two proposals in front of you.
The first proposal is a fee increase based on the Fire fees not being increased over the last approximately 10 years. Due to the nature of the increase, I recommend that an increase be phased in over 3 years.
The second proposal are new fees that have not been charged previously in Fullerton. Although not in the recommendation, the City Council could also phase these fees in over 3 years.
The City Council could approve both proposals or approve the first proposal and further consider the second proposal.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Fiscal and Organizational Stability
Public Safety.
FISCAL IMPACT
Recommendation 1 Fiscal Impact:
The proposed Fire Fee Schedule modifications would help the Fire Department approach full cost recovery for public safety programs and services. The average proposed fee would increase approximately 13% a year over three years, which staff projects would generate $679,000 annually in additional cost recovery revenue.
Recommendation 2 Fiscal Impact:
This recommendation proposes 64 new fees. Staff will incorporate these new fees will be into the FY 2023-24 Proposed Budget for City Council adoption on June 6, 2023, if approved and if timing permits. Staff projects these new fees would generate approximately $530,000 annually.
Staff will incorporate City Council direction regarding the proposed fee changes into the FY 2023-24 Proposed Budget proposal for City Council adoption on June 6, 2023.
DISCUSSION
The Fire Department is rebuilding its organization at the direction of City Council. Part of this rebuilding process evaluates how the Department provides critical services to citizens and businesses while remaining cost effective. The Department sees itself as a community partner providing guidance and education to citizens and businesses to keep personnel safe and reduce interruptions to their livelihood due to any type of emergency.
The City of Fullerton adopts a user fee schedule to fund programs and services. The fees generally recover the cost associated with providing the service. The Fullerton Fire Department engaged Willdan Financial Services to conduct a comprehensive study of fire fees. The department has not modified fees for approximately ten years resulting in a significant gap between existing fees and the actual cost of providing service. The study (Attachment 1) identifies the full cost recovery for Fire Department services and programs and the recommended fee amount.
The study helped the City determine the full cost of the services provided by the Department. Willdan established a series of additional objectives including:
develop a rational basis for setting fees
identify subsidy amount, if applicable, of each fee in the model enhance fairness and equity
ensure compliance with State law
develop an updatable and comprehensive list of fees
maintain accordance with City policies and goals.
Willdan used a case study analysis method to calculate fees. This approach estimates the actual labor and material costs associated with providing a unit of service to a single user. Wildan estimated costs based on interviews with City staff regarding the time typically spent on tasks, review of available records and a time and materials analysis.
The study determined that 125 department fees do not recover the full cost of the service provided, resulting in the City subsidizing this cost through other funds. In addition, the study found that three fees should decrease, 11 fees should remain as currently set and the City should add 64 new fees to the fee schedule (Attachment 1).
The estimated proposed fee increase to existing Fire Department fees would average $84 per fee or approximately 38%., Willdan and the City Manager recommend using a phased approach over three years for the subsidized fees to reach full cost recovery, given the significant gap between the existing fees and the actual cost of providing the service. Attachment 1 outlines a full breakdown of the proposed fee increases. This proposal would set Fire Department fees for Fiscal Years 2023-24 through 2025-26, if recommended. The recommendations do not include adjustments for consumer price index (CPI) and other budgeted increases beyond Year 1. City Council may consider incorporating an option to adjust the fee schedule annually using the Consumer Price Index (CPI) as an inflationary factor to avoid significant cost recovery gaps in the future.
New Proposed Fees
Staff proposes adding 64 new fees to the fee schedule to properly reflect the auxiliary services provided by the Fire Department to private businesses, local organizations and the community. For example, the Fire Department receives requests to provide medical or fire suppression services for a special event such as the CSUF Commencement or to assist a private business with Fire Watch due to required repairs to their fire protection system. The City intends to provide these services at full cost recovery and has included these costs in the proposed new fees.
These new fees memorialize the critical work of the Department in reducing and managing the overall community risk. The following outlines the new fees:
17 new permit fees reflecting updates in the 2022 California Fire Code adopted by City Council 14 rates of service for suppression fees
Nine non-state mandated inspection fees
Six plan check fees currently in the Community and Economic Development fee schedule Six fees for fire prevention services outside normal requests which take numerous staff hours to complete Four updates to false alarm and failure to comply orders or notices fees Three reinspection fees without any corrections at the time of reinspection One fee to charge for AB-38, Defensible Space Inspections required by state law Added fees include 6% Technology Automation Fee for upgrading Fire Prevention software, Accident / Incident Response fee and Drug / DUI Incident Response fee allowed by California Government Code Section 53155 A Weed Abatement fee already in the Fullerton Municipal Code.
Staff recommends City Council provide direction to staff on whether to incorporate the proposed fee changes, as recommended by the Fire fee study (Attachment 1), to the current Fire Department Fee Schedule to approach full cost recovery over a three-year period starting FY 2023-24 and whether to incorporate new Fire Department fees, as recommended by the Fire fee study and listed in at full cost recovery rate for Fire services currently provided by the Department and not recovered beginning FY 2023-24.
Staff will incorporate City Council direction regarding the proposed fee changes into the FY 2023-24 Annual Fee Resolution presented to City Council for adoption on June 6, 2023.
Attachments:
Attachment 1 – PowerPoint Presentation
Attachment 2 – Fire User Fee Study
cc: City Manager Eric J. Levitt
Fire Department Fiscal Year 2023-24 Fee Updates
May 2, 2023 - Page 2