User Fee Updates
Development Services & Engineering
May 16, 2023
ATTACHMENT 6
Purpose of the User Fee Update
Last completed
in
2017
Updated every
5 years
• The City’s fees are based on a cost-of-services assessment that should be undertaken every five years to ensure that the fees keep track with inflationary factors, staffing levels, and capital costs • The last User Fee Study for Development Services and Engineering was completed in 2017
ATTACHMENT 6
Background
What is it?
• A review of fees for services rendered for development-related permits, entitlements, reviews, and inspections
• Involved multiple departments in analyzing the full costs of services and cost recovery
• Opportunity to add new fees or remove outdated/unnecessary fees ATTACHMENT 6
Background
Why?
• Cost Recovery
• Properly Fund Needed Programs
• Identify full costs associated with providing development-related services and also the associated revenue gaps
• Ensure compliance with State Law
• Provide greater transparency
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Background
Why now?
• Work started in 2020 with the Cost Allocation Plan
• Work continued in 2021 with User Fee Study
• Cost increases, inflationary pressures on labor, materials, supplies, and consultant costs
• City needs to:
• Ensure existing services are aligned with the cost of service; and • Re-align fee amounts with the necessary cost recovery • Last study completed in 2017
ATTACHMENT 6
Fee Study Process
Steps
• Identify existing and potential fees for service
• Review and adjust time estimates by position for each service provided • Allocate overhead costs across all fee and non-fee services. • Analyze current gaps between full cost of service and revenue. • Identify the full cost of service for fees
• Meet with stakeholders and solicit feedback
• Propose revised fees to ensure full cost recovery
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Determining Total Cost of Service
• Once time spent for a fee activity is determined for each position, applicable City costs are calculated.
• Salary, benefits, and departmental costs are based on the FY20 budget • Citywide overhead was calculated through the Cost Allocation Plan Direct
(Salaries, benefits, and
allowable
expenditures)
Dept. Overhead
(Management,
Admin, supplies,
utilities, etc.)
Citywide Overhead
(Central Services
such as Payroll, HR,
City Attorney, etc.)
Total Cost
ATTACHMENT 6
Results Overview
Planning Building Safety Engineering
Fee Decreases 3 16 0
No Change in Fee 2 15 6
Fee Increases 63 78 41
New Fees 2 2 17
Average Increase 10% 2% 53%
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Staff Recommendations
1. Conduct the Public Hearing
2. Adopt a resolution:
• Accepting the User Fee Update Report by Willdan Financial Services • Establishing revised Fee Schedules for Planning, Building Safety, and Engineering
• Establishing Annual Inflationary Increase to the Fee Schedule every January 1st.
ATTACHMENT 6
Thank you
ATTACHMENT 6