Agenda — Finance Committee, June 21, 2022

City Council Chambers City of Menifee
29844 Haun Road Finance Committee
Menifee, CA 92586 Meeting Agenda
Lesa S
obek, Committee Member Tuesday, June 21, 2022
Dean Deines, Committee Member 2:00 PM Regular Meeting AGENDA

1. CAL

L TO ORDER

2. RO

LL CALL

3. PRE
SENTATIONS – None

4. PUBL

IC COMMENTS

5. APPR

OVAL OF MEETING MINUTES

5.1 A
pril 8, 2021 Minutes

5.2 June 22, 2021 Minutes

5.3 August 5, 2021 Minutes

5.4 August 16, 2021 Minutes

6. DIS

CUSSION ITEMS

6.1 Pr
oposed Finance Committee Meeting Dates for 2022
Recommended Action:

1. Staff Recommend setting the following Finance Committee Meeting Dates for 2022.
• Tuesday
, July 26, 2022 3:00 p.m.
• Tuesday, September 27, 2022 3:00 p.m.
• Tuesday, November 29, 2022 3:00 p.m.

6. 2 Proposed Bond Issue for Community Facilities District No. 2021-1 (Banner Park) Recommended Action:

1. Review the proposed Series 1 bond issue request for Community Facilities District No. 2021 -1 (Banner Park) by Pulte Homes to finance the costs of certain public improvements for the development of a residential tract containing 256 units within the City; and

2. Rec
ommend the finance team to proceed with preparation of the Official Statement and other legal documents related to the transaction for presentation to the City Council at a future City Council meeting. 1 6.3 Proposed Bond Issue for Community Facilities District No. 2020-2 (Del Oro) Recommended Action:

1. Review the proposed bond issue request for Community Facilities District No. 2022-2 (Del Oro) by D.R. Horton to finance the costs of certain public improvements for the development of a residential tract containing 68 units within the City; and

6.4 Comprehensive Cost of Services (User Fee) Study - Draft Recommended Action:

1. It is recommended that the Finance Committee receive a presentation from staff regarding the recently completed Comprehensive Cost of Services (User Fee) Study – Draft and provide staff with input on cost recovery objectives and the recommended fee proposals.

2. Recommend the finance team to proceed with preparation of the staff report and presentation to the City Council at a future City Council meeting.

7. STAFF COMMENTS

8. COMMITTEE REPORTS/COMMENTS ON COMMITTEE ACTIVITIES

9. FUTURE AGENDA ITEMS

9.1. July 26, 2022: Investment Policy & Development Impact (DIF) Fees

10. ADJOURNMENT

Decorum Policy Notes
Please use a speaker request form when you wish to address the Committee . The Committee anticipates and encourages public participation at its Committee meetings, both on agenda items and during the public comments period. Please use respect by not having your cell phones on, refrain from talking in the audience or outbursts that may be disruptive. While we encourage participation, we ask there be a mutual respect for the proceedings.

Agenda Materials
Materials related to an item on this Agenda, including those submitted to the Committee after distribution of the agenda packet, are available for public inspection by contacting the City Clerk, at (951) 672-6777 during normal business hours.

Compliance with the Americans with Disabilities Act
If you need special assistance to participate in this meeting, you should contact Sarah Manwarin g, City Clerk, at (951) 672-6777. Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to this meeting. 2 City Council Chambers City of Menifee
Via Zoom Finance Committee
Menifee, CA 92586 Special Meeting Minutes
L
esa Sobek, Committee Member Thursday, April 8, 2021 Dean Deines, Committee Member 3:00 PM Special Meeting

MINUTES

1. CA
LL TO ORDER: The Meeting was called to order at 3:02 p.m.

2. R
OLL CALL: All Committee Members Deines and Sobek were present.

3. FLA
G SALUTE: Committee Member Deines led the flag salute.

4. P
RESENTATIONS: None.

5. A
PPROVAL OF MEETING MINUTES: The following minutes were approved 2-0.

5. 1 April 7, 2020 Finance Committee Minutes

5.2 May 14, 2020 Finance Committee Minutes

5.3 May 28, 2020 Finance Committee Minutes

6. DI

SCUSSION ITEMS

6.1 C
ity’s Investment Plan
R
ecommended Action:

R eview the sample portfolio developed by Piper Sandler for the City of Menifee, based on the City’s cash- flow needs and available funds to invest, and provide comments to staff.

P
iper Sandler Financial Strategies Consultant Victor Ume- Ukeje presented the City’s Portfolio. Mr. Ume -Ukeje reviewed the cash flow report and shared the City’s current investments and proposed investments to help increase the yield with no risk. The Committee Members a sked clarifying questions about the portfolio cashflow related to Expected, to Maturity, and to Call.

C
ommittee Member Deines asked for the new plan to go to Council for introduction of the new plan to Council and the public; and a quarterly detailed report to Council thereafter.

Deines asked to see as part of the presentation to show the earnings and what it means to the City. Rochelle, we could put together the anticipated yield in LAIF with the results.

The Committee was in consensus.

6. 2 Building and Land Purchase
R
ecommended Action:

Review the property appraisal and cost analysis of the police facility and land lease compared to purchase of the associated building and land, and recommend submittal to Council.

C
ame to committee July 2020. Received the appraisal. Updated the cost analysis with 2%. Looking over 10 years, would yield over $1.1M. savings if invested to purchase land and building, lease over 10 years $4.9M save.

C
ommittee Members asked questions of staff. The Committee said it was a good investment and agreed to take it to Council for final approval. 3 7. STAFF COMMENTS: None.

8. COMMITTEE REPORTS/COMMENTS ON COMMITTEE ACTIVITIES: None.

9. FUTURE AGENDA ITEMS: None.

10. ADJOURNMENT: The meeting adjourned at 3:50 p.m.

_________________________
Sarah A. Manwaring, City Clerk

4 City Council Chambers
29844 Haun Road
Menifee, CA 92586
(In-Person)
City of Menifee
Finance Committee
Meeting Minutes
Lesa Sobek, Committee Member
Dean Deines, Committee Member
Tuesday, June 22, 2021
3:00 PM Regular Meeting

MINUTES

1. CA
LL TO ORDER: The Meeting was called to order at 3:06 p.m.

2. R
OLL CALL: All Committee Members Deines and Sobek were present.

3. FLA
G SALUTE: Committee Member Deines led the flag salute.

4. P
RESENTATIONS: None.

5. P
UBLIC COMMENTS: None.

6. A
PPROVAL OF MEETING MINUTES: The following minutes were approved 2-0.

6. 1 October 15, 2020 Finance Committee Minutes

7. DI

SCUSSION ITEMS

7. 1 Fund Balance Policy for the General Fund
Recommended Action:

Re view and discuss the Fund Balance Policy reserve requirements and provide a recommendation to City Council to amend the Minimum Level of Fund Balance.

A
ssistant City Manager Rochelle Clayton presented the Fund Balance report. Committee members asked for clarification of the definition of fund balance and the different types of fund balances.

M
s. Clayton reported on the total general fund revenues and expenditures. She continued to report on the Committees options for the fund balance policy. The Committee discussed changes to the policy to allow for funding allocations for additional facilities including City Hall. Committee Members asked questions of staff. The Committee agreed on option #2 and requested specific clarification of the names of the three different fund balance types.

8. S
TAFF COMMENTS: None.

9. C
OMMITTEE REPORTS/COMMENTS ON COMMITTEE ACTIVITIES: None.

10. F
UTURE AGENDA ITEMS: None.

11. ADJO
URNMENT: The meeting adjourned.
_________________________

Sarah A. Manwaring, City Clerk
5 City Council Chambers
29844 Haun Road
Menifee, CA 92586
(In-Person)
City of Menifee
Finance Committee
Meeting Minutes
Lesa Sobek, Committee Member
Dean Deines, Committee Member
Tuesday, August 5, 2021
2:00 PM Regular Meeting

MINUTES

1. CA
LL TO ORDER: The Meeting was called to order at 2:00 p.m.

2. R
OLL CALL: All Committee Members Deines and Sobek were present.

3. FLA
G SALUTE: Committee Member Deines led the flag salute.

4. P
RESENTATIONS: None.

5. P
UBLIC COMMENTS: None.

6. A
PPROVAL OF MEETING MINUTES: The following minutes were approved 2-0.

6. 1 January 26, 2021 Finance Committee Minutes

7. DI

SCUSSION ITEMS

7. 1 Proposed Bond Issue for Community Facilities District No. 2019-1 (Meadow Run) Recommended Action:

1. Review the proposed bond issue request for Community Facilities District No. 2019-1 (Meadow Run) by Meritage Homes to finance the costs of certain public improvements for the development of a residential tract containing 65 proposed lots within the City; and

Mr
. Spicer presented the background information and the prepared documents for the Meadow Run CFD project. The Committee asked questions about the process of the bond issuance and paying them back. The Committee discussed possible premium projects.

The Committee approved the recommendation unanimously.

7. 2 Proposed Bond Issue for Community Facilities District No. 2020-1 (McCall Mesa) R
ecommended Action

1. Review the proposed bond issue request for Community Facilities District No. 2020-1 (McCall Mesa) by Lennar Homes to finance the costs of certain public improvements for the development of a residential tract containing 258 units within the City; and

M
r. Spicer presented the background information and the prepared documents for the McCall Mesa project. Mr. Spicer asked for the first issuance of bonds to take advantage of interest rates.
6 The Committee asked questions about developers financing their fees. Mr. Spicer shared that if they are, we will request a premium of 10%. The Committee discussed possible premium projects. The Committee approved the recommendation unanimously.

8. STAFF COMMENTS: There were no staff comments. Staff discussed the process if the economy crashes and home prices go down. Mr. Spicer stated that they do not issue bonds unless they are well developed.

9. COMMITTEE REPORTS/COMMENTS ON COMMITTEE ACTIVITIES: None.

10. FUTURE AGENDA ITEMS: The next meeting is set for August 16 to discuss refinancing streetlights.

11. ADJOURNMENT: The meeting adjourned at 3:06 p.m.

_________________________
Sarah A. Manwaring, City Clerk

7 City Council Chambers
29844 Haun Road
Menifee, CA 92586
(In-Person)
City of Menifee
Finance Committee
Meeting Minutes
Lesa Sobek, Committee Member
Dean Deines, Committee Member
Monday, August 16, 2021
3:00 PM Special Meeting

MINUTES

1. CA
LL TO ORDER: The Meeting was called to order at 3:03 p.m.

2. R
OLL CALL: All Committee Members Deines and Sobek were present.

3. FLA
G SALUTE: Committee Member Deines led the flag salute.

4. P
RESENTATIONS: None.

5. P
UBLIC COMMENTS: None.

6. A
PPROVAL OF MEETING MINUTES: None.

7. DI

SCUSSION ITEMS

7. 1 Refinancing of 2019 Streetlight Financing Agreement with Banc of America Leasing & Capital
R
ecommended Action:

Review and discuss the Amended and Restated Equipment Lease/Purchase Agreement with Banc of America Leasing & Capital, LLC and the Amended and Restated Paying Agent Agreement and certain actions in connection therewith and provide direction to staff to bring to City Council for approval and adoption.

The C
ommittee asked questions about the terms of the financing and Mr. Busch from Urban Futures answered the questions. There was discussion of leasing cellular services for small cells. This could assist Romoland area with their cell service. The Committee asked questions about the process of the bond issuance and paying them back. The Committee discussed possible premium projects. The Committee approved the recommendation unanimously.

8. S
TAFF COMMENTS: None.

9. C
OMMITTEE REPORTS/COMMENTS ON COMMITTEE ACTIVITIES: None.

10. F
UTURE AGENDA ITEMS: None.

11. ADJO
URNMENT: The meeting adjourned at 3:22 p.m.
_________________________

Sarah A. Manwaring, City Clerk
8 CITY OF MENIFEE
SUBJECT: Proposed Bond Issue for Community Facilities District No. 2020-1 (Banner Park)
MEETING DATE: June 21, 2022
TO: Finance Committee
PREPARED BY: Jizelle Sandoval, Financial Analyst
REVIEWED BY: Wendy Preece, Deputy Director of Finance

RECOMMENDED ACTION

1. R
eview the proposed Series 1 bond issue request for Community Faci lities District No. 2020-1 (Banner Park) by Pulte Homes to finance the costs of certain public improvements for the development of a residential tract containing 256 units within the City; and

SCUSSION
The
developer, Pulte Homes, owns a residential tract containing 2 56 proposed lots within the City. The proposed residential tract is located north of Newport Road and east of Lindenberger Road. On June 7, 2022 Pulte Homes requested the issuance of bonds for Community Facilities District No. 2020-1 (Banner Park) (“CFD No. 2020-1”) to fund eligible facilities.

C
urrently of the 256 proposed lots, 121 lots have building permits issued, 15 sold & in escrow, and 65 Sold & Closed. Based on the builder’s projections by the end of September they should have 100% of their building permits issued and 83% of their units closed. The builder is requesting to issue the bonds on a little less than half of the development for an estimated $5,680,000. The bond authorization limit for this District is not to exceed $17M . Due to current interest rates it is anticipated that all the eligible facilities of approximately $4.5 M would be funded through the bond sale.

A
preliminary bond analysis was prepared by Spicer Consulting Group to evaluate the vi ability of the bond issuance estimating the valuation, delinquency history, and effective tax rates (ETR). The development has a relatively strong value to lien ratio of 14.73:1, greater than the City’s policy of 4:1 and an estimated ETR less than 2%. The current FY 2022-23 will be the first year the CFD taxes are levied for the CFD, therefore there are no prior year delinquencies. The improvements proposed to be financed include:
9 City of Menifee Staff Report
Banner Park – CFD Bond
June 21, 2022

Page 2 of 2 ends

 City Development Impact Fees and Facilities
 EMWD Fees
 Menifee Union School District Fees.

This item is to discuss bond issuance criteria and review the proposed bond issuance for CFD No. 2020-1.

ATTACHMENTS

1. Request for Issuance of Bonds Letter (Zimmerman Group)

2. Preliminary Bond Sale Analysis

3. Location Map

4. Project Map
10 28202 CABOT RD | SUITE 620 | LAGUNA NIGUEL, CA 92677 PHONE: (949) 542-7070 | FAX: (949) 542-7076
www.zimmermangroup.com
June 7, 2022
Rochelle Clayton
Assistant City Manager
City of Menifee
29844 Haun Road
Menifee, CA 92586
T. (951) 723-3701
E. [email protected]
RE: Request for Issuance of Bonds for CFD No. 2021-1 (Banner Park) Dear Ms. Clayton,
On behalf of Pulte Home (“Developer”), we are requesting the City of Menifee (“City”) to move forward with the issuance of bonds (“Bonds”) for CFD No. 2021-1 (Banner Park) (“CFD”). As you may be aware, the CFD is comprised of 256 lots within Tract Map Nos. 32102 and 32102-1 (the “Project”). We would like to issue a series of bonds secured by 121 permitted lots within the Project that will be classified as Developed Property for tax year 2022-23 (“Series 1 Bonds”). A summary of the development status for the Series 1 Bonds are issued is included in the table below.

Development Status Units
% of
Total
Closings 65 54%
Models 6 5%
Under Construction* 50 41%
Total Permitted Units
(FY2022-23) 121 100%
*All 50 homes under construction are sold and anticipated to close prior to September 1, 2022.

The attached Exhibit A shows the estimated bond sizing and debt service schedule for the Series 1 Bonds, which results in approximately $4.7M in construction proceeds. This $4.9M would fund approximately 33% of the CFD eligible facilities shown in the attached Exhibit B. Additional CFD eligible facilities would be funded with the proceeds from a second series of bonds, which would be anticipated to be issued 12 months after the issuance off the Series 1 Bonds. The purpose of issuing two series of bonds is to limit the special taxes to be levied on property owned by the Developer.

We appreciate your consideration of thi s
request and look forward t o working with the City team to issue the Series 1 Bonds for the Project. If you have any questions, please contact me at (949) 542-7072.

Sincerely,
John Zimmerman
Principal
CC: Jizelle Sandoval, City of Menifee
Shane Spicer, Spicer Consulting Group
Steve Ford, Pulte Home
11 EXHIBIT A
Pulte Homes - Banner Park (TR Nos. 32102 and 32102-1)
Estimated Debt Service & Bond Sizing Schedule
June 7, 2022

ISSUANCE ASSUMPTIONS ESTIMATED SOURCES AND USES
Closing Date 10/15/2022 Sources
Special Tax Revenue Escalation 2.000% Par Bond Amount 5,680,000$ Annual Administration Expense 25,000$
Administration Expense Escalation 2.000% Uses
Debt Service Coverage Ratio 110% Reserve Fund 490,074$
Underwriter Discount Estimate 1.500% Capitalized Interest - Issuance Costs Estimate 225,000$ Underwriter Discount 85,200 Months of Capitalized Interest - Costs Of Issuance 225,000 Gross Special Tax Revenues 22-23 332,335$ Construction Fund 4,879,726 Total Uses 5,680,000$
Estimated Funding Per Unit 19,061$

BOND DEBT SERVICE
Period Gross Priority Capitalized Net Debt Debt Service Ending Revenues Admin Principal Yield Interest Interest Service Coverage 9/1/2023 332,335$ 25,500$ 15,000$ 1.690% 229,753$ -$ 244,753$ 125.37% 9/1/2024 338,982 26,010 20,000 1.690% 261,491 - 281,491 111.18% 9/1/2025 345,762 26,530 25,000 1.940% 261,153 - 286,153 111.56% 9/1/2026 352,677 27,061 35,000 2.290% 260,668 - 295,668 110.13% 9/1/2027 359,731 27,602 40,000 2.690% 259,866 - 299,866 110.76% 9/1/2028 366,925 28,154 45,000 2.990% 258,790 - 303,790 111.51% 9/1/2029 374,264 28,717 55,000 3.190% 257,445 - 312,445 110.59% 9/1/2030 381,749 29,291 60,000 3.440% 255,690 - 315,690 111.65% 9/1/2031 389,384 29,877 70,000 3.690% 253,626 - 323,626 111.09% 9/1/2032 397,172 30,475 80,000 3.890% 251,043 - 331,043 110.77% 9/1/2033 405,115 31,084 90,000 4.040% 247,931 - 337,931 110.68% 9/1/2034 413,217 31,706 100,000 4.140% 244,295 - 344,295 110.81% 9/1/2035 421,482 32,340 110,000 4.190% 240,155 - 350,155 111.13% 9/1/2036 429,911 32,987 125,000 4.270% 235,546 - 360,546 110.09% 9/1/2037 438,509 33,647 135,000 4.340% 230,209 - 365,209 110.86% 9/1/2038 447,280 34,320 150,000 4.410% 224,350 - 374,350 110.31% 9/1/2039 456,225 35,006 165,000 4.470% 217,735 - 382,735 110.06% 9/1/2040 465,350 35,706 180,000 4.540% 210,359 - 390,359 110.06% 9/1/2041 474,657 36,420 195,000 4.590% 202,187 - 397,187 110.34% 9/1/2042 484,150 37,149 210,000 4.640% 193,237 - 403,237 110.85% 9/1/2043 493,833 37,892 230,000 4.690% 183,493 - 413,493 110.27% 9/1/2044 503,710 38,649 250,000 4.740% 172,706 - 422,706 110.02% 9/1/2045 513,784 39,422 270,000 4.790% 160,856 - 430,856 110.10% 9/1/2046 524,059 40,211 290,000 4.890% 147,923 - 437,923 110.49% 9/1/2047 534,541 41,015 310,000 4.890% 133,742 - 443,742 111.22% 9/1/2048 545,231 41,835 335,000 4.890% 118,583 - 453,583 110.98% 9/1/2049 556,136 42,672 360,000 4.890% 102,201 - 462,201 111.09% 9/1/2050 567,259 43,526 390,000 4.890% 84,597 - 474,597 110.35% 9/1/2051 578,604 44,396 415,000 4.890% 65,526 - 480,526 111.17% 9/1/2052 590,176 45,284 445,000 4.890% 45,233 - 490,233 111.15% 9/1/2053 601,980 46,190 480,000 4.890% 23,472 - 503,472 110.39% Total 14,084,188 1,080,676 5,680,000 4.75% 6,033,854 - 11,713,854 110.02% 12 EXHIBIT B
City of Menifee CFD No. 2021-1
Pulte Homes - Banner Park (TR Nos. 32102 and 32102-1)
Preliminary List of CFD Eligible Facilities
June 7, 2022
Total Units 256
Updated Facilities
Per Unit Total
City of Menifee Fees (a)
Law Enforcement 231$ 59,136$
Fire Facilities 614 157,184
Circulation 4,670 1,195,520
Storm Drainage (Homeland / Romoland Zone) - - Animal Shelter (Not CFD Eligible) - -
General Government 1,021 261,376
Public Use Facilities 154 39,424
Parks - Land Acquisition 215 55,040
Parks - Improvements 661 169,216
Master Planning (Not CFD Eligible) - -
Library Facilities (Not CFD Eligible) - - Subtotal City DIF fees (b) 7,566$ 1,936,896$
Additional City Faciltiies 1,513 387,379
Total City Fees 9,079$ 2,324,275$
City Improvements Formation
Backbone Street Improvements $3,499 $895,729
Intract Street Improvements $7,751 $1,984,341
Tract/Intract Storm Drain Improvements $8,125 $2,079,982 City 5 Acre Park $5,859 $1,500,000
Surveying / Staking / Geotechnical $840 $215,000
Inspection Fees $581 $148,802
Total City Improvements $26,656 $6,823,854
EMWD Fees & Facilities (b) 2022 Fees
Water Financial Participation Charge 6,845$ 1,752,320$ Sewer Financial Participation Charge 3,208 821,248 Sewer Treatment Plant Capacity Charge 6,081 1,556,736 Meter Fee 377 96,512
Water Development Fee 300 76,800
Irrigation Meter Fees 1.5" (Qty: 6 Meters) 585 149,820 Total EMWD Fees 17,396$ 4,453,436$
Menifee School District Fees (c) 3,500$ 896,000$ Total Eligible Facilities 56,631$ 14,497,565$
Footnotes
(a) Represents the City of Menifee DIF Fees dated July 1, 2018. (b) Represents EMWD's connection and capacity fees effective 1/1/2020. (c) Per the Memorandum of Agreement dated August 18, 2005, Menifee School District agreed to fund the mitigation fee through a CFD.
13 CITY OF MENIFEE
Community Facilities District No. 2021-1
(Banner Park)
Preliminary Bond Analysis
As of 6/9/2022
Preliminary Bond Compliance Table
Requirement 2021-1

1. Value to Lien(1)

4.00:1 14.73:1

2. Delinquency Levels Less than 5% N/A

3. Effective Tax Rate(2)

2.00% 1.74% - 1.76%
(1) Value to Lien is based upon estimated sizing information and Proposed Home Prices. (2) Range includes FY 2021-22 enrollment.

1. General Information & Development Status
District Formation Date June 2, 2021
District Assessed Value(1)
N/A
Bond Structure 91% Assigned
Estimated Preliminary Par Amount(2)
$5,450,000
Preliminary Value to Lien(3)

14.73:1
(1) District Assessed Value information not available via Riverside County as of 6/4/2021 (2) Par amount estimated based on estimated 3.3% Interest Rate. (3) Value to Lien is based upon estimated sizing information and Proposed Home Prices. 6/4/2021 Ownership Status As Of
Tract No. Land Owner Map Recordation
32102 Pulte Home 9/30/2020
No. Lots @
Buildout
Permits Issued as of
5/1/2022
Developed
Percentage
Sold & In Escrow
to Date
Sold & Closed
to Date
Ave Monthly
Absorption
Five Month
Projection
256 Lots 121 Lots 47% 15 65 7 100 Lots
Remaining 135 Lots Projected Closed 83%
Projected Permitted 100%

2. Special Tax Levy & Delinquency Status
No. Parcels FY 2022-23 Levy Delinquencies(1)
121 $332,335 N/ A
(1) Delinquency information is unavailable as the FY 2022-23 levy is the district's inaugural levy.

3. Bond Issuance Impact to Property Owners
Avg Home
Value(1) Ad-Valorem Tax Other Taxes CFD Tax Total Tax ETR $663,276 $7,707 $1,082 $2,747 $11,536 1.74%
(1) Based upon Sales Price provided by Pulte on June 9, 2022.

4. Proposed Use of Proceeds (Preliminary)
Estimated Project Fund Capacity: $14,497,565
Sources Total
Bond Proceeds: Par Amount 5,450,000$
Facilities Special Tax Levy FY 22-23(1) -$
Total Sources 5,450,000 $
Uses Total
Project Fund Proceeds 4,521,296 $
Underwriter's Discount 95,375 $
Capitalized Interest 122,625 $
Debt Service Reserve Fund 460,704 $
Cost of Issuance 250,000 $
Total Uses 5,450,000$
Net Bond Funds -$
Criteria
Estimated Average Tax Bill for FY 22-23
14 DOMENIGONI PKWY

LINDENBERGER RD
0 510 1,020255
Feet
CFD Boundary

LOCATION MAP
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (BANNER PARK)

CITY OF MENIFEE
¹
15 ATTACHMENT #2

PROJECT LOCATION MAP
CFD NO. 2021-1 (BANNER PARK)

16 CITY OF MENIFEE

SUBJECT: Proposed Bond Issue for Community Facilities District No. 2020-2 (Del Oro)
MEETING DATE: June 21, 2022
TO: Finance Committee
PREPARED BY: Jizelle Sandoval, Financial Analyst
REVIEWED BY: Wendy Preece, Deputy Director of Finance

RECOMMENDED ACTION

1. Review the proposed Series 1 bond issue request for Community Faci lities District No. 2021-2 (Del Oro) by D.R. Horton to finance the costs of certain public improvements for the development of a residential tract containing 68 units within the City; and

DISCUSSION

The developer, D.R. Horton, owns a residential tract containing 68 proposed lots within the City.

The proposed residential tract is located north of Overland Court, south of Holland Road, west of Palomar Road , and east of Hanover Lane. On May 16, 2022, D.R. Horton requested the issuance of bonds for Community Facilities District No. 2020-2 (Del Oro) (“CFD No. 2020-2”) to fund eligible facilities.

Currently of the 68 proposed lots, all 68 lots have building permits issued , 26 sold & in escrow, and 23 Sold & Closed. Based on the builder’s projections by November they should have 100% of their building permits issued and 85% of their units closed. The builder is requesting to issue the bonds on the entire development for an estimated $2,740,000. The bond authorization li mit for this District is not to exceed $4M. Due to current interest rates it is anticipated that all the eligible facilities of approximately $2.2M would be funded through the bond sale.

A preliminary bond analysis was prepared by Spicer Consulting Group to evaluate the viability of the bond issuance estimating the valuation, delinquency history, and effective tax rates (ETR). The development has a relatively strong value to lien ratio of 16:24:1, greater than the City’s policy of 4:1 and an estimated ETR less than 1.7-1.8%. The current FY 2022- 23 will be the first year the CFD taxes are levied for the CFD, therefore there are no prior year delinquencies. Based on current interest rates the CFD taxes levied could be reduced by at 17 City of Menifee Staff Report
Del Oro – CFD Bond
June 21, 2022

Page 2 of 2 ends

least 10% while fully fund ing the eligible improvements. The improvements proposed to be financed include:

 City Development Impact Fees and Facilities
 EMWD Fees

This item is to discuss bond issuance criteria and review the proposed bond issuance for CFD No. 2020-1.

ATTACHMENTS

1. Request for Issuance of Bonds Letter (Zimmerman Group)

2. Preliminary Bond Sale Analysis

3. Location Map

4. Project Map
18 19

CITY OF MENIFEE
Community Facilities District No. 2020-2
(Del Oro)
Tract Nos. 36852
As of 6/13/2022
Preliminary Bond Compliance Table
Requirement 2020-2

1. Value to Lien(1)

4.00:1 16.24:1

2. Delinquency Levels Less than 5% N/A

3. Effective Tax Rate(2)

2.00% 1.79% - 1.80%
(1) Value to Lien is based upon estimated sizing information and Proposed Home Prices. (2) Range includes FY 2021-22 enrollment.

1. General Information & Development Status
District Formation Date July 15, 2020
District Assessed Value(1)
N/A
Bond Structure 91% Assigned
Estimated Preliminary Par Amount(2)
$2,740,000
Preliminary Value to Lien(3)

16.24:1
(1) District Assessed Value information not available via Riverside County as of 6/4/2022 (2) Par amount estimated based on estimated 4.75% Interest Rate. (3) Value to Lien is based upon estimated sizing information and Proposed Home Prices. 6/4/2021 Ownership Status As Of
Tract No. Land Owner Map Recordation
36852 DR Horton 8/18/2021
No. Lots @
Buildout
Permits Issued as of
6/13/2022
Developed
Percentage
Sold & In Escrow
to Date
Sold & Closed
to Date
Ave Monthly
Absorption
Five Month
Projection
68 Lots 68 Lots 100% 26 23 7 58 Lots
Projected Closed 85%
Projected Permitted 100%

2. Special Tax Levy & Delinquency Status
No. Parcels FY 2021-22 Levy Delinquencies(1)
2 $5,091.16 0%
(1) Delinquency information is as of June 13, 2022.

3. Bond Issuance Impact to Property Owners
Avg Home
Value(1) Ad-Valorem Tax Other Taxes CFD Tax Total Tax ETR $654,396 $7,603 $1,421 $2,705 $11,729 1.79%

4. Proposed Use of Proceeds (Preliminary)
Estimated Project Fund Capacity: $2,203,352
Sources Total
Bond Proceeds: Par Amount 2,740,000$
Facilities Special Tax Levy FY 21-22(1) -$
Total Sources 2,740,000 $
Uses Total
Project Fund Proceeds 2,203,352 $
Underwriter's Discount 54,800 $
Capitalized Interest -$
Debt Service Reserve Fund 231,848 $
Cost of Issuance 250,000 $
Total Uses 2,740,000$
Net Bond Funds -$
Criteria
Estimated Average Tax Bill for FY 21-22
20 HOLLAND RD

OVERLAND CT

HANOVER LN

PALOMAR RD
0 440 880220
Feet
CFD Boundary

LOCATION MAP
COMMUNITY FACILITIES DISTRICT NO. 2020-2 (DEL ORO)

CITY OF MENIFEE
¹
21 ATTACHMENT #2

PROJECT LOCATION MAP
CFD NO. 2020-2 (DEL ORO)

22 CITY OF MENIFEE

SUBJECT: Comprehensive Cost of Services (User Fee) Study - Draft MEETING DATE: June 21, 2022
TO: Finance Committee
PREPARED BY: Jizelle Sandoval, Financial Analyst
REVIEWED BY: Wendy Preece, Deputy Finance Director

RECOMMENDED ACTION

1. It is recommended that the Finance Committee receive a presentation from staff regarding the recently completed C omprehensive Cost of S ervices (User Fee) St udy – Draft and provide staff with direction on cost recovery objectives and the recommended fee proposals.

2. Recommend the finance team to proceed with preparation of the staff report related to the presentation to the City Council at a future City Council meeting.

DISCUSSION

In an effort to establish appropriate levels of cost recovery for City services that provide benefits to individuals or groups , rather than the general public, the City initiated a cost of service and fee study.

The City engaged the Matrix Consulting Group to perform this study analyzing the cost -of- service relationships that exist between fees for service activities in the fol lowing areas: City Clerk, F inance, Community Services, Code Enforcement, Police, Fire, Building, Planning and Engineering. The results of this Study provide a tool for understanding current service level, the cost and demand for those services, and what fees for service can and should be charged.

The full User Fee Study - Draft is included as Attachment 1. The last comprehensive user fee study was completed in 2012 and implemented in 2013 (Resolution #13-320). There have been subsequent partial user fee studies implemented by Resolution 16- 499, Resolution 18-741 and Resolution 20- 907. Following this Finance Committee meeting, staff will seek feedback from the Building Industry Association (BIA), as well as the Developer Stakeholder Group.

Analysis

The methodology employed by the Matrix Consulting Group is a widely accepted “bottom up” approach to cost analysis, where time spent per unit of fee activity is determined for each position within a Department or Program. Once time spent for a fee activity is determined, all applicable City costs are then considered in the calculation of the “full” cost of providing each 23 City of Menifee Staff Report
User Fee Study
June 21, 2022

Page 2 of 4 ends

service. The overview of types of costs applied in establishing the “full” cost of services provided by the City include both direct and indirect costs.

The work accomplished by the Matrix Consulting Group in the analysis of the proposed fees for service involved the following steps:
• Departmental Staff Interviews
• Data Collection
• Cost Analysis
• Review and Approval of Results with City Staff

Results of Study

When comparing Fiscal Year 2022 fee -related budgeted expenditures with fee -related revenue generated in Fiscal Year 2020 /21 the City is under -recovering its costs by approximately $4.3 million or a recovery rate of 65% . The following table shows by major service area / discipline, the revenue collected, the total annual cost, the resulting annual surplus / (deficit) a nd the resulting cost recovery.

Table 1
Service
Area
Total
Annual
Revenue
Total
Annual
Cost
Annual
Surplus/
(Deficit)
Cost
Recovery
%
Admin/Miscellaneous $126,232 $243,368 ($117,135) 52%
Community Services $225,203 $2,638,874 ($2,413,671) 9%
Development Related $8,498,703 $9,314,229 ($815,526) 91% TOTAL $8,850,138 $12,196,470 ($3,346,332) 65%

As the table indicates, the City’s largest source of subsidy is related to Community Services at $2.4 million, which is expected due to the nature of these activities. The next largest subsidy at $816,000 is in relation to development -related activities. If Community Services is exclu ded, then the overall subsidy for the City decreases from $3 .3 million to $ 933,000 with a cost recovery level of 90%. The subsidy in development is related to current planning appli cations, which require extensive city staff time and effort. The other component of the deficit is in relation to internal cross -departmental support for Building, Planning, and Engineering. Implementing the full cost recovery fees and updated departmental support fees for Planning and Engineering for Building fees will help ensure that the City can help bridge this deficit.

The detailed documentation of the Study will show an over -collection for some fees (on a per unit basis), and an undercharge for most others. The r esults of this analysis will provide the Departments and the City with guidance on how to right -size their fees to ensure that each service unit is set at an amount that does not exceed the full cost of providing that service. The display of the cost recov ery figures shown in this report are meant to provide a basis for policy development discussions among Council members and City staff, and do not represent a recommendation for where or how the Council should act. The setting of the “rate” or “price” for services, whether at 100 percent full cost recovery or lower, is a policy decision to be made only 24 City of Menifee Staff Report
User Fee Study
June 21, 2022

Page 3 of 4 ends

by the Council, with input from City staff and the community . Staff recommends fees at full cost recovery with the exception those listed in Table 2.

Table 2
Fee
No. Fee Title Current
Fee
Total
Cost
Staff Recommended
Fee Cost
Recovery %
City Clerk

1.08 Certification of Life New $29 $15 52%

1.10 Affidavit Process for Building Plans New $207 $100 48% Community Services: Facility Rentals (hourly rate)

3.04 Small: Resident Non-Profit $20 $25 $20 81%

3.08 Medium: Resident $25 $39 $38 97%

3.09 Medium: Resident Non-Profit $25 $39 $25 65%

3.14 Large: Resident Non-Profit $40 $52 $35 67%
Community Services: Picnic Rentals (hourly rate)

3.2 Small: Non-Resident $20 $42 $20 47%

3.21 Small: Resident $10 $42 $15 35%

3.22 Small: Resident Non-Profit $10 $42 $10 24%

3.24 Large: Non-Resident $25 $42 $30 71%

3.25 Large: Resident $15 $42 $23 53%

3.26 Large: Resident Non-Profit $15 $42 $15 35%

3.28 Large: Rental w/Jumper/Food Vendor $0 $52 $25 48%
Field Rentals (hourly rate)

3.31 Ballfield/Multi-purpose: Resident $10 $25 $19 75%

3.32 Ballfield/Multi-purpose: Resident Non-profit $10 $25 $13 50%

3.36 Field Lights: Resident Non-profit $10 $15 $10 67%

3.41 Ballfield/Multi-purpose: Resident $10 $25 $19 75%

3.42 Ballfield/Multi-purpose: Resident Non-profit $10 $25 $13 50% Park Rentals for Private Events (Central, Centennial, La Ladera, Audie Murphy Parks Only) – Per Permit

3.44 Park Special Events Application $0 $157 $50 32%

3.46 Non-Resident (100-249 attendees) $0 $231 $95 41%

3.47 Resident (100-249 attendees) $0 $231 $71 31%

3.48 Resident Non-Profit (100-249 attendees) $0 $231 $48 21%

3.51 Non-Resident (250-499 attendees) $0 $401 $170 42%

3.52 Resident (250-499 attendees) $0 $401 $128 32%

3.53 Resident Non-Profit (250-499 attendees) $0 $401 $85 21%

3.56 Non-Resident (500-999 attendees) $0 $572 $270 47%

3.57 Resident (500-999 attendees) $0 $572 $203 35%

3.58 Resident Non-Profit (500-999 attendees) $0 $572 $135 24%

3.61 Non-Resident (1,000+ attendees) $0 $743 $350 47%

3.62 Resident (1,000+ attendees) $0 $743 $263 35%

3.63 Resident Non-Profit (1,000+ attendees) $0 $743 $175 24% POLICE

5.01 Police Reports $18 $39 $18 46%

5.02 Media Duplication $20 $374 $20 5%
25 City of Menifee Staff Report
User Fee Study
June 21, 2022

Page 4 of 4 ends

Fee
No. Fee Title Current
Fee
Total
Cost
Staff Recommended
Fee Cost
Recovery %

5.03 Police Clearance Letters $20 $28 $20 71%

5.04 Citation Sign Offs Menifee PD Citation $15 $38 $15 39%

5.05 Concealed Weapons Permit: Initial application $100 $535 $100 19%

5.06 Concealed Weapons Permit: Renewals $25 $535 $25 5%

5.07 Concealed Weapons Permit: Updates $10 $535 $10 2%

5.08 Livescan $25 $34 $25 74%

5.13 VIN Verification Charge $25 $34 $25 74%

5.14 Vehicle Release (Stored) $100 $201 $100 50%

5.15 Vehicle Release (Impounded or DUI) $150 $201 $150 75%

5.16 Abandoned $100 $201 $100 50%

8. PLANNING – Flat Fees

8.05 Conditional Use Permit: Major Revision $6,748 $13,735 $8,911 65%

8.10 Film Permit <3 days $815 $1,525 $100 7%

8.31 Plot Plan Major Revision $13,496 $27,928 $17,274 62%

8.39 Pre-Application Review $1,442 $8,539 $2,500 29%

8.53 Tentative Parcel Map: Commercial/Industrial $12,940 $17,316 $13,852 80%

8.55 Tentative Parcel Map: Residential $11,040 $17,316 $13,852 80%

8.56 Tentative Parcel Map: Revised $7,740 $14,721 $11,777 80%

8.57 Tentative Parcel Map: Minor Condition $3,340 $9,224 $7,379 80%

8.61 Temporary Use Permit: Major 501c3 $868 $2,030 $1,015 50%

8.63 Temporary Use Permit: Minor 501c3 $348 $1,351 $675 50%

9. ENGINEERING

9.28 Encroachment Permits for Major Projects (Deposit) New $1,733 $1,500 87%

9.121 Wide and Overload Permit: Daily (Per Permit) $16 $360 $16 4%

9.122 Wide and Overload Permit: Annual (Per Permit) $90 $360 $90 25%

ATTACHMENTS

1. Report on Cost of Services (User Fee) Study - Draft
26 Report on Cost of Services (User Fee) Study

CITY OF MENIFEE, CALIFORNIA
FIN

AL REPORT
June 2022
DRAFT
27 Table of Contents

1. Introduction and Executive Summary 1

2. Legal Framework and Policy Considerations 4

3. User Fee Study Methodology 8

4. Results Overview 10

5. City Clerk 11

6. Finance 13

7. Community Services 15

8. Code Enforcement 22

9. Police 24

10. Fire 26

11. Building 40

12. Planning 51

13. Engineering 57

14. Comparative Survey 64

15. Development Services Surcharges 87

16. Annual Revenue Impact 91

17. Cost Recovery Considerations 95
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28 Cost of Services (User Fee) Study MENIFEE, CA

Matrix Consulting Group 1

1. Introduction and Executive Summary

The draft report, which follows, presents the results of the Citywide Cost of Services (User Fee) Study conducted by the Matrix Consulting Group for the City of Menifee. 1 Project Background and Overview

The Matrix Consulting Group analyzed the cost-of-service relationships that exist between fees for service activities in the following areas: City Clerk, Finance, Community Services, Code Enforcement, Police, Fire, Building, Planning, and Engineering. The results of this Study provide a tool for understanding current service levels, the cost and demand for those services, and what fees for service can and should be charged. 2 General Project Approach and Methodology

The methodology employed by the Matrix Consulting Group is a widely accepted “bottom up” approach to cost analysis, where time spent per unit of fee activity is determined for each position within a Department or Program. Once time spent for a fee activity is determined, all applicable City costs are then considered in the calculation of the “full” cost of providing each service. The following table provides an overview of types of costs applied in establishing the “full” cost of services provided by the City:

Table 1: Overview of Cost Components

Cost Component Description

Direct

Fiscal Year 2022 Budgeted salaries, benefits and allowable expenditures.

Indirect

Division, departmental, and Citywide administration / management and clerical support.

Together, the cost components in the table above comprise the calculation of the total “full” cost of providing any particular service, regardless of whether a fee for that service is charged.

The work accomplished by the Matrix Consulting Group in the analysis of the proposed fees for service involved the following steps:
• Departmental Staff Interviews: The project team interviewed Departmental staff regarding their needs for clarification to the structure of existing fee items, or for addition of new fee items.

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29 Cost of Services (User Fee) Study MENIFEE, CA

Matrix Consulting Group 2

• Data Collection: Data was collected for each permit / service, including time estimates. In addition, all budgeted costs and staffing levels for Fiscal Year 20 22 were entered into the Matrix Consulting Group’s analytical software model.

• Cost Analysis: The full cost of providing each service included in the analysis was established.

• Review and Approval of Results with City Staff: Department management has reviewed and approved these documented results.

A more detailed description of user fee methodology, as well as legal and policy considerations are provided in subsequent chapters of this report. 3 Summary of Results

When comparing Fiscal Year 20 22 fee-related budgeted expenditures with fee-related revenue generated in Fiscal Year 20/21 the City is under-recovering its costs by approximately $3.3 million and recovering 73% of its costs. The following table shows by major service area / discipline, the revenue collected, the total annual cost, the resulting annual surplus / (deficit) and the resulting cost recovery.

Table 2: Annual Cost Recovery Analysis

Service Area
Total Annual
Revenue
Total
Annual Cost
Annual
Surplus/(Deficit)
Cost
Recovery %
Admin / Miscellaneous $126,232 $243,368 ($117,135) 52%
Community Services $225,203 $2,638,874 ($2,413,671) 9%
Development-Related $8,498,703 $9,314,229 ($815,526) 91% TOTAL $8,850,138 $12,196,470 ($3,346,332) 73%

The subsidy in development is related to fire prevention and current planning applications, which require extensive city staff time and effort. The other component of the deficit is in relation to internal cross-departmental support for Building, Planning, and Engineering. Implementing the full cost fees, and updated departmental support fees for Planning and Engineering for Buildi ng fees will help ensure that the City can help bridge this deficit.

The detailed documentation of the Study will show an over-collection for some fees (on a per unit basis), and an undercharge for most others. The results of this analysis will DRAFT
30 Cost of Services (User Fee) Study MENIFEE, CA

Matrix Consulting Group 3

provide the Department and the City with guidance on how to right-size their fees to ensure that each service unit is set at an amount that does not exceed the full cost of providing that service.

The display of the cost recovery figures shown in this report are meant to provide a basis for policy development discussions among Council members and City staff, and do not represent a recommendation for where or how the Council should act. The setting of the “rate” or “price” for services, whether at 100 percent full cost recovery or lower, is a policy decision to be made only by the Council, with input from City staff and the community. 4 Considerations for Cost Recovery Policy and Updates

The Matrix Consulting Group recommends that the City use the information contained in this report to discuss, adopt, and implement a formal Cost Recovery Policy, including a mechanism for the annual update of fees for service.
1 Adopt a Formal Cost Recovery Policy
The Matrix Consulting Group strongly recommends that the Council adopt a formalized, individual cost recovery policy for each service area included in this Study. Whenever a cost recovery policy is established at less than 100% of the full cost of providing services, a known gap in funding is recognized and may then potentially be recovered through other revenue sources. The Matrix Consulting Group considers a formalized cost recovery policy for various fees for service an industry Best Management Practice. 2 Adopt an Annual Fee Update / Increase Mechanism
The purpose of a comprehensive update is to completely revisit the analytical structure, service level estimates and assumptions, and to account for any major shifts in cost components or organizational structures that have occurred since the City’s previous analysis. The City of Menifee last conducted a Planning, Engineering, and Fire fee study in 2019 and prior to that a comprehensive fee study in 2014. Therefore, the City is in the practice of conducting comprehensive analyses every 5-7 years. The City should continue this practice to capture any changes to its organizational structure, processes, as well as any new service areas.

In between comprehensive updates, the City should continue to utilize published industry economic factors such as Consumer Pr ice Index (CPI) to increase fees. Utilizing an annual increase mechanism would ensure that the City receives appropriate fee increases that reflect growth in costs.

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31 Cost of Services (User Fee) Study MENIFEE, CA

Matrix Consulting Group 4

2. Legal Framework and Policy Considerations

This section of the report is intended to provide an overview regarding overall legal rules and regulations as well as general policy considerations for fees for service. A “user fee” is a charge for service provided by a governmental agency to a public citizen or group. In California, several constitutional laws such as Propositions 13, 4, and 218, State Government Codes 66014 and 66016, and more recently Prop 26 and the Attorney General’s Opinion 92-506 set the parameters under which the user fees typical ly administered by local government are established and administered. Specifically, California State Law, Government Code 66014(a), stipulates that user fees charged by local agencies “…may not exceed the estimated reasonable cost of providing the service for which the fee is charged”.
1 General Principles and Philosophies Regarding User Fees

Local governments are providers of many types of general services to their communities.

While all services provided by local government are beneficial to constituents, some services can be classified as globally beneficial to all citizens, while others provide more of a direct benefit to a specific group or individual. The following table provides examples of services provided by local government within a continuum of the degree of community benefit received:

Table 3: Services in Relation to Benefit Received

“Global” Community Benefit “Global” Benefit and an
Individual or Group Benefit Individual or Group Benefit

• Police
• Park Maintenance
• Fire Suppression

• Recreation / Community
Services
• Fire Prevention

• Building Permits
• Planning and Zoning Approval
• Site Plan Review
• Engineering Development
Review
• Facility Rentals

Funding for local government is obtained from a myriad of revenue sources such as taxes, fines, grants, special charges, user fees, etc. In recent years, alternative tax revenues, which typically offset subsidies for services provided to the community, hav e become increasingly limited. These limitations have caused increased attention on user fee activities as a revenue source that can offset costs otherwise subsidized (usually) by the general fund. In Table 3, services in the “global benefit” section tend to be funded primarily through voter approved tax revenues. In the middle of the table, one typically finds a mixture of taxes, user fee, and other funding sources. Finally, in the “individual / DRAFT
32 Cost of Services (User Fee) Study MENIFEE, CA

Matrix Consulting Group 5

group benefit” section of the table, lie the services provided by local government that are typically funded almost entirely by user fee revenue.

The following are two central concepts regarding the establishment of user fees:
• Fees should be assessed according to the degree of individual or private benefit gained from services. For example, the processing and approval of a land use or building permit will generally result in monetary gain to the applicant, whereas Police services and Fire Suppression are examples of services that are essential to the safety of the community at large.

• A profit-making objective should not be included in the assessment of user fees.

In fact, California laws require that the charges for service be in direct proportion to the costs associated with providing those services. Once a charge for service is assessed at a level higher than the actual cost of providing a service, the term “user fee” may no longer apply. The charge may become a tax subject to voter approval.

Therefore, it is commonly accepted that user fees are established at a level that will recover up to, and not more than, the cost of providing a particular service. 2 General Policy Considerations Regarding User Fees

Undoubtedly, there are programs, circumstances, and services that justify a subsidy from a tax based or alternative revenue source. However, jurisdictions typically prioritize the use of revenue sources for the provision of services based on the continuum of benefit received.

Within the services that are typically funded by user fees, the Matrix Consulting Group recognizes several reasons why City staff or the Council may not advocate the full cost recovery of services. The following factors are key policy considerations in setting fees at less than 100 percent of cost recovery:
• Limitations posed by an external agency. The State or an outside agency will occasionally set a maximum, minimum, or limit the jurisdiction’s ability to charge a fee at all. An example includes time spent copying and retrieving public documents and / or transportation permits.

• Encouragement of desired behaviors. Keeping fees for certain services below full cost recovery may provide better compliance from the community. For example, if the cost of a permit for charging a water heater in residential home is higher than the cost of the water heater itself, many citizens will avoid pulling the permit.

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33 Cost of Services (User Fee) Study MENIFEE, CA

Matrix Consulting Group 6

• Benefit received by user of the service and the community at large is mutual.

Many services that directly benefit a group or individual equally benefit the community as a whole. Examples include Planning Design Review, historical dedications and certain types of special events.

The Matrix Consulting Group recognizes the need for policies that intentionally subsidize certain activities. The primary goals of a User Fee Study are to provide a fair and equitable basis for determining the costs of providing services and ensure that the City complies with State law.
3 Parks and Recreation Specific Regulations
There are specific rules and regulations within the State Law that impact Parks and Recreation related activities directly. These can be separated into two categories – rental rates and recreation programs. The following points provide further information regarding these items:

1. Rental Rates: One of the exceptions to the tax category under Proposition 26 is a charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property

1. There is no requirement
that these rates must be limited to the cost of service, as they can be dependent upon a variety of features of the facility or park being rented.

2. Recreation Programs: Under Proposition 26, the exception to the tax category is a charge that is “imposed”. Based upon the League of California Cities implementation guide for Proposition 26, as well as other legal opinions, recreation classes, youth sports, adult sports, are not a charge that is “imposed upon residents”. Rather residents have the option to voluntarily participate in those programs and utilize a private entity (non-governmental entity) for those activities.

Therefore, these rates are allowed to be set based upon the market options within the area rather than being restricted to the cost of service being provided.

Utilizing these two principals is key to understanding the results generated through this analysis. As such, any surpluses in these areas reflected in the report do not need to be reduced to the cost of service, as the fee amount(s) may be based upon the rates that the market can bear.

1 Proposition 26 Article XIII C(1)(e)(4)
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34 Cost of Services (User Fee) Study MENIFEE, CA

Matrix Consulting Group 7

4 Summary of Legal Restrictions and Policy Considerations

Once the full cost of providing services is known, the next step is to determine the “rate” or “price” for services at a level which is up to, and not more than the full cost amount.

The Council is responsible for this decision, which often becomes a question of balancing service levels and funding sources. The placement of a service or activity within the continuum of benefit received may require extensive discussion and at times fall into a “grey area”. However, with the resulting cost of services information from a User Fee Study, the Council can be assured that the adopted fee for service is reasonable, fair, and legal. The City will need to review all fees for service in this analysis and where subsidies are identified may decide to increase them to reduce the deficit, and where over- recoveries are identified the fee must be reduced to be in compliance with the law.

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35 Cost of Services (User Fee) Study MENIFEE, CA

Matrix Consulting Group 8

3. User Fee Study Methodology

The Matrix Consulting Group utilizes a cost allocation methodology commonly known and accepted as the “bottom-up” approach to establishing User Fees. The term means that several cost components are calculated for each fee or service. These components then build upon each other to comprise the total cost for providing the service. The following chart describes the components of a full cost calculation:

The general steps utilized by
8urrentt team to determine allocations of cost components to a particular fee or service are:
• Calculate fully burdened hourly rates by position, including direct & indirect costs;

• Develop time estimates for the average time spent to deliver each service included in the study;

• Distribute the appropriate amount of the other cost components to each fee or service based on the staff time allocation basis, or another reasonable basis.

The results of these allocations provide detailed documentation for the reasonable determination of the actual cost of providing each service.

One of the key study assumptions utilized in the “bottom up” approach is the use of time estimate averages for the provision of each fee related service. Utilization of time estimates is a reasonable and defensible approach, especially since experienced staff members who understand service levels and processes unique to the City developed these estimates.

The project team worked closely with City staff in developing time estimates with the following criteria:
• Estimates are representative of average times for providing services. Extremely difficult or abnormally simple projects are not factored in the analysis.

DIRECT
(Salaries, Benefits,
Services, Supplies)

INDIRECT
(Departmental Admin,
Services Supplies, Citywide
Overhead etc.)
Total Cost
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36 Cost of Services (User Fee) Study MENIFEE, CA

Matrix Consulting Group 9

• Estimates reflect the time associated with the position or positions that typi cally perform a service.

• Estimates provided by staff are reviewed and approved by the division / department, and often involve multiple iterations before a Study is finalized.

• Estimates are reviewed by the project team for “reasonableness” against their experience with other agencies.

• Estimates were not based on time in motion studies, as they are not practical for the scope of services and time frame for this project.

• Estimates match the current or proposed staffing levels to ensure there is no over- allocation of staff resources to fee and non-fee related activities.

The Matrix Consulting Group agrees that while the use of time estimates is not perfect, it is the best alternative available for setting a standard level of service for which to base a jurisdiction’s fees for service and meets the requirements of California law.

The alternative to time estimating is actual time tracking, often referred to billing on a “time and materials” basis. Except in the case of anomalous or sometimes very large and complex projects, the Matrix Consulting Group believes this approach to not be cost effective or reasonable for the following reasons:
• Accuracy in time tracking is compromised by the additional administrative burden required to track, bill, and collect for services in this manner.

• Additional costs are associated with administrative staff’s billing, refunding, and monitoring deposit accounts.

• Customers often prefer to know the fees for services in advance of applying for permits or participating in programs.

• Departments can better predict revenue streams and staff needs using standardized time estimates and anticipated permit volumes.

Situations arise where the size and complexity of a given project warrants time tracking and billing on a “time and materials” basis. The Matrix Consulting Group has recommended taking a deposit and charging Actual Costs for such fees as appropriate and itemized within the current fee schedule.

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37 Cost of Services (User Fee) Study MENIFEE, CA

Matrix Consulting Group 10

4. Results Overview

The motivation behind a cost of services (User Fee) analysis is for the City Council and Departmental staff to maintain services at a level that is both accepted and effective for the community, and also to maintain control over the policy and management of th ese services.

It should be noted that the results presented in this report are not a precise measurement.

In general, a cost of service analysis takes a “snapshot in time”, where a fiscal year of adopted budgeted cost information is compared to the prior fiscal year of revenue, and workload data available. Changes to the structure of fee names, along with the use of time estimates allow only for a reasonable projection of subsidies and revenue.

Consequently, the Council and Department staff should rely conservatively upon these estimates to gauge the impact of implementation going forward.

Discussion of results in the following chapters is intended as a summary of extensive and voluminous cost allocation documentation produced during the Study. Each chapter will include detailed cost calculation results for each major permit category including the following:
• Modifications or Issues: discussions regarding any revisions to the current fee schedule, including elimination or addition of fees.

• “Per Unit” Results: comparison of the full cost of providing each unit of service to the current fee for each unit of service (where applicable).

The full analytical results were provided to City staff under separate cover from this summary report.

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38 Cost of Services (User Fee) Study MENIFEE, CA

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5. City Clerk

The City Clerk’s Office is responsible for administering elections, maintaining accurate and transparent City records, and providing City Departments and the public with access to City records and legislative actions. The fees examined within this study relate to document reproduction and certification, candidate and initiative processing, research, certification of life and copies, and passport application and renewals. The following subsections discuss fee schedule modifications and detailed per unit results for the fee- related services provided by the City Clerk’s Office.
1 Fee Schedule Modifications
In discussions with City Clerk staff, modifications were made to the current fee schedule, including:

• Eliminated Fees: Appeal to Fee Committee and Bid Specification Request, as the City no longer provides these services.

• New Fees: Certification of Life, Certified Copies, Affidavit Process for Building Plans, Copies of Maps, and a section for Passport application and renewal fees were added.

• Fee Name Changes: The title Reproduction was changed to Digital Media Reproduction, to capture reproduction that is provided for videos and meetings.

• Relocation of Fees: Appeal fees were moved from City Clerk to Planning and Code Enforcement, to ensure that the applicant only sees a singular fee that is charged by the City to cover the entire appeal process.

The modifications noted above better reflect the services being provided by City Clerk staff.
2 Detailed Results
The City Clerk’s office collects fees for document reproduction, and passport application and renewals. The total cost calculated for each service includes direct staff costs and Departmental and Citywide overhead. The following table details the title/name, current fee, total cost, and surplus or deficit associated with each service offered.

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Table 4: Total Cost Per Unit Results – City Clerk

Fee Name
Current
Fee
Total Cost
Per Unit
Surplus /
(Deficit) per Unit
Public Nuisance Lien Processing $670 $391 $279
Document Reproduction2 $0.25 $0.25 $0
Document Certification $20 $17 $3
Digital Media Reproduction $5 $6 ($1)
Candidate Filing Processing3 $25 $25 $0
City Initiative Processing4 $200 $2005 $0
Research/Compiling Service Actual Cost
Certification of Life New $29 N / A
Certified Copies $15 $15 $0
Affidavit Process for Building Plans New $207 N / A
Copies of Maps Actual Cost
Passports6
Adult Application Fees:

First Time Passport Book $110 $110 $0
First Time Passport Card $30 $30 $0
First Time Passport Book & Card $140 $140 $0
Passport Card only $30 $30 $0
Passport Execution Fee (Adult / Minor) $35 $35 $0
Adult Renewal Fees:

Passport Book $110 $110 $0
Passport Card only $30 $30 $0
Passport Book & Card $140 $140 $0
Minor Application Fee
Minor Passport Book $80 $80 $0
Minor Passport Card $15 $15 $0
Minor Passport Book & Card $95 $95 $0

A majority of City Clerk’s fees are set by the state and federal laws. Of the remaining fees, Document Certification ($3) and Public Nuisance Lien Processing ($279) are over - recovering, while Digital Media Reproduction is under-recovering by $1. Overall, the City Clerk’s average per unit cost recovery is 104%.

2 The Document Reproduction fee is set per CPRA 6250 -6270 3 Candidate Filing Processing fee is set per ELEC 10228 4 City Initiative Processing is set per ELEC 9 202(b)
5 Per ELEC 9202(b), City Initiative Processing is a deposit rather than a fee. The deposit is fully refunded if the initiative makes it onto the ballot.
6 Passport fees are pulled from the State Department. T he most recent link describing the State / Federal fees is as follows:
https://travel.state.gov/content/dam/passports/forms -fees/Passport%20Fees%20Chart_TSG_DEC2021.pdf DRAFT
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6. Finance

The Finance Department provides fiscal management and support to all City Departments and programs, by ensuring implementation and adherence to the City’s fiscal municipal code, policies, and state and federal statutes. The fees examined within this study relate to business registration, business licensing, and return check processing. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Finance Department. 1 Fee Schedule Modifications
The project team reviewed the current fee structure with City staff and the following modification were made:

• New Fees: Reinstatement of Business License and Single Day Event Business License were added as new fee categories to capture services already provided.

• Expansion of Fee Categories: The Business Registration Change was expanded into Name Change and Physical Address change to capture the different level of effort associated with processing those services.

The modifications noted above better reflect the services being provided by Finance staff and will allow for more accurate cost of service calculations. 2 Detailed Results
The Finance Department collects fees for business registration, business licensing, and return c heck processing services. The total cost calculated for each service includes direct staff costs, direct materials costs (where applicable), and Departmental and Citywide overhead. The following table details the title / name, current fee, total cost, and surplus or deficit associated with each Finance Department fee.

Table 5: Total Cost Per Unit Results – Finance

Fee Name
Current
Fee
Total Cost
Per Unit
Surplus /
(Deficit) per Unit
New Business Registration $65 $76 ($11)
Renewal Business Registration $35 $57 ($22)
Late Payment Renewal Business Registration $35 $19 $16
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Fee Name
Current
Fee
Total Cost
Per Unit
Surplus /
(Deficit) per Unit
Business Registration Change of Name $5 $19 ($14)
Business Registration Change of Physical Address $5 $38 ($33) Business Registration Change of Mailing Address $5 $6 ($1) Duplicate Business License $5 $6 ($1)
Reinstatement of Business License Penalty
Single Day Event Business License $5 $19 ($14)
Returned Check Processing7
1st Check $25 $25 $0
Subsequent Checks $35 $35 $0

The Reinstatement of Business License is a penalty and as such was not studied. While, the City is overcharging for Late Payment Renewal Business Registration by $16, this is a penalty fee and is not subject to the same rules and regulations as user fees. All other fees from the Finance Department show an under-recovery. The deficit ranges from a low of $1 for Duplicate Business License to a high of $33 for Business Registration Change of Physical Address. Overall, the average per unit cost recovery associated with services provided by Finance is 76%.

7 Returned Check Processing fees are set per CIV § 1719(a).

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7. Community Services

The Community Services Department is responsible for providing recreational opportunities that promote involvement and engage the community in order to improve quality of life among residents. Fees examined in this study relate to facility rentals, picnic rentals, field rentals, after school programs, camp, classes, and sports programs. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Community Services Department. 1 Fee Schedule Modifications
During discussions with Community Services staff, modifications were proposed to the current fee schedule, which include:
• Restructuring of fees: The fee schedule currently lists facility rentals by room name. The City is adding new rooms and rather than calling out each room, it has been decided to categorize the rooms by size and list fees by size in three categories: small, medium, and large meeting rooms. This allows the City to charge more consistently across facilities that have similar sized meeting spaces, as well as accommodate any new facilities.

• Addition of Fees : Several new fees were added including: residential self-haul permits (application and renewal), administrative fee for cancellation of rentals, picnic rentals with jumpers and/or food vendors, special events, and park rentals.

The modifications outlined above will ensure that Community Services’ fee schedule accurately reflects t he services being provided by staff and help ensure that costs are captured appropriately.
2 Detailed Results
The Community Services Department collects fees for facility rentals, picnic rentals, field rentals, after school programs, camp, classes, and sports programs. The total cost calculated for each service includes direct staff costs, Departmental, and Citywide overhead, as well as any specific material costs. Due to the current fee being variable based upon the season of service as well as either per participant per session or per hour of day, it was not possible to compare the City’s current fee to the full cost fee. Therefore, the following table only shows the total cost per unit calculated for rentals and classes.

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Table 6: Total Cost Per Unit Results – Community Services

Fee Name Unit
Total City
Cost Per Unit
Facility Rentals:

Small8 - Up to 20 capacity Per hour $25
Medium9 - Up to 50 capacity Per hour $39
Large10 - Up to 150 capacity Per hour $52
Picnic Rentals:

Picnic Shelter – Small Per hour $42
Picnic Shelter – Large Per hour $42
Rental with Jumper / Food Vendor Per hour $52
Field Rentals:

One-Time Rentals
Ballfield or Multi-Purpose Field Per hour $25
Field Lights Per hour $15
Leagues or Multiple Rentals
Ballfield or Multi-Purpose Field Per hour $25
Park Rental / Private Event (Central, Centennial, La Ladera, and Audie Murphy Park Only)
Special Events Application Per Permit $157
100-249 Attendees Per Permit $231
250-500 Attendees Per Permit $401
500-999 Attendees Per Permit $572
1,000+ Attendees Per Permit $743
Miscellaneous Fees:

Administrative Processing Fee – Rental Cancellation Per Permit $12 Residential Self-Haul Permit Application Per Permit $101 Residential Self-Haul Permit Renewal Per Permit $33
After School & Camps:

Lazy Creek Recreation Center
After School Adventures Program (A.S.A.P) Per participant per day $20 Tiny Tots Programs
Adventures Per participant per day $10
Explorers Per participant per day $13
Discovery Per participant per day $13
Steamers Per participant per day $17
Wee Folks Per participant per day $11
Summer Camps
Summer Adventure Camp Per participant per day $15
Summer Sports Camp Per participant per day $19
Summer Specialty Camps Per participant per day $19
Tiny Tots Summer Camp Per participant per day $13
Youth Leaders of Menifee
Ready, Set, Future! Teen Summit Per participant per session $97 FY18-19 Camps
Neil Winter Football Camp Per participant per day $13
Spring Break Camp Per participant per day $67
Winter Break Camp Per participant per day $70

8 Small room rentals include Rose and Iris rooms.
9 Medium room rentals include the Magnolia room.
10 Large room rentals include the Palm Multipurpose Room.

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Fee Name Unit
Total City
Cost Per Unit
Classes:

Virtual Classes
Little Learners Spanish Per participant per day $16
Little Learners STEAMers Per participant per day $20
Little Learners Watch Me Grow Per participant per month $7 Free Virtual Workshops
Food for Thought: Changing My Diet to Management
My Conditions Per participant per session $4
Stress Management Per participant per session $4
How to Read Nutrition Labels Per participant per session $4 Laughter Yoga Per participant per session $4
Kay Ceniceros Senior Center – Virtual Workshops
Crafty Creations Spring Virtual Workshop Per participant per session $30 Crafty Creations Summer Virtual Workshop Per participant per session $30 Bone Health Basics: Understanding Osteoporosis Per participant per session $4 Home Safety and Preventing Falls and Injuries Per participant per session $4 Depression: Common, Disabling, Unrecognized,
Treatable Per participant per session $4
Senior Center Events
Drive-In Bingo Per participant per session $8
Older Americans Celebration Per participant per session $20 Senior Center Services
Food Box Program Per participant per day $216
Senior Lunch Program Per participant per day $67
FY18-19 Classes
Art Club Per participant per session $37
Button Art Workshop Per participant per session $99
Computers 101 Per participant per session $37
Healthy Workshop Per participant per session $5
Loteria Per participant per session $4
Loteria/Bingo Per participant per session $2
Senior Health Fair Per participant per session $301
Summer Excursions Per participant per session $87
Tech Time Per participant per session $62
Teen Trip Per participant per session $98
Trivia/Trivia Club Per participant per session $9
Walking Class Per participant per session $31
Sports:

Nacho Average Sports Per participant per day $15
Peewee Sports Per participant per day $10
Audie Murphy Ranch Skate Park
Annual Membership Pass Per Person $3,997
Day Passes Per person per day $13
Basketball Per participant per session $239

It is important to note that for Community Services unlike other services, the fee should be based upon market factors. The figures shown in the table represent staff time associated with administering these rentals and programs, but do not reflect the act ual market value associated with renting these facilities, or market value for providing similar

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programs in the private market. Therefore, staff and City management should review and utilize these results as a guideline for updating the current fees for services related to rentals and programs.

Additionally, it is considered best practice that programmatic recreation fees (i.e. sports, aquatics, classes, etc.) not be listed on a master fee schedule and be determined based upon demand for those services as well as the season for those activities. Therefore, while the project team has estimated the cost of these services, it is up to City Community Services staff to apply their discretion when determining where and how to set fees depending upon the programs and classes that are offered. 3 Fee Categories
The Community Services Department collects fees for facility rentals, picnic rentals, field rentals, community classes, and sports programs that are typically discounted for certain groups of people. It is common for recreation services to discount rates for residents and non-profit organizations in order to offer community benefiting opportunities at a more attainable cost. The following subsections discuss the fee categories associated with rentals and programs.
1 Rentals
Meeting room rentals, field rentals, and picnic table rentals are currently charged based on different categories. The following points outline the rental categories utilized by the City:
• Non-Resident Commercial: Renters for this category are charged the full cost of each rental. This category represents businesses that are not located within the City of Menifee.

• Commercial Resident / Non-Resident Non-Profit: Renters for this category do not receive a discount for facility rentals and receive a discount of 75 and 80% for picnic shelter rentals. This category represents businesses within the City of Menifee, or Non-Profits that have majority of their members not as residents of the City of Menifee.

• Resident: Renters for this category represent the residents within the community and they receive a 50% discount on small and medium room rentals and small picnic shelters, 57% discount on large room rentals, and 60% discount on large picnic shelter.

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• Resident Non-Profits Civic/Social/Other: Renters for this category receive the same discount as the resident and reflect non-profit or civic organizations that have the majority of their members as Menifee residents.

• Resident Non-Profit Youth Sports: This category represents youth sports leagues whose participates are residents within the community. The youth league receives discounts of 25% for field rentals, 50% discount for field lights rental and facility rentals (including small picnic shelter), and 60% discount for large picnic shelter rental.

• City Sponsored: City Sponsored rentals are not charged any fee.

As shown in the points, the City discounts rates for residents and non-profits, however, the discount varies by type of rental and residency status for each rental type. It is recommended that these categories be streamlined and a recommended and consistent discount be developed. The following table shows by category the proposed recommended discount percentage:

Table 7: Community Services – Recommended Fee Categories and Discounts

Fee Name Discount % % of Fee
Non-Resident 0% 100%
Resident 25% 75%
Resident Non-Profit (Youth Sports and Others) 50% 50%
City Sponsored 100% 0%

Condensing the categories will allow the City to better represent its cost recovery philosophy and ensure consistency in discounts. The percentage of fee column was created to provide through another perspective that the 25% discount represents 75% of the fee being charged.
2 Classes/Programs
Classes and sports programs, while still charged based on residency within the City like rentals, are charged by only two categories: residents and non-residents. Typically for most classes and sports programs non-residents are charged the full cost while residents are typically given a discount of about 17% of the non-resident rate. The project team would recommend that similar to Rentals, the City develop a consistent policy. All resident rates and fees should be discounted by 25%. This will ensure consistency across all categories for community services.

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4 Cost Recovery
Through this study, the City of Menifee, would like to follow industry best practices by setting its fees based upon targeted cost recovery levels based upon program activities.

This pricing methodology is known as the Pricing Pyramid Methodology. The pyramid methodology indicates that the higher up the pyramid a program is placed, the greater its cost recovery. For example programs such as Afterschool programs would be closer to the lower levels of the pyramid, whereas programs such as the Drive in Bingo would be closer to the top of the pyramid. The following graphic shows the pricing pyramid.

Based upon the project team’s experience and research of national jurisdictions’ cost recovery policies, which identified targeted cost recovery percentages for each program area, a state specific average was developed. The following table shows the California targeted average cost recovery percentage.

Table 8: Community Services – National Average of Cost Recovery

Program Category California Average
Athletics 65%
Afterschool 40%
Outdoor Camps 70%
Aquatics 55%
Premium Services 100%+

The City may desire to develop the use of the Pricing Pyramid Method to develop cost recovery policies and percentages. While it is important to identify where programs would typically fall within the pyramid, and establish cost recovery guidelines for each level, the Highly
Individual
Mostly Individual
Individual / Community
Benefit
Community / Individual Benefit
Community Benefit
No Cost recovery Full Subsidy

Full Recovery

No Subsidy

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City should treat each program uniquely. This would allow the City flexibility to balance a program’s desirability with its impact on the community as a whole.

Ultimately, while the City has the ability to set fees based upon market demand, the City’s goal and desire is to provide high quality recreation activities in a cost effective and cost recoverable manner.

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8. Code Enforcement

The Code Enforcement Department is responsible for ensuring the community abides by and corrects violations of the Menifee Municipal Code. The fees examined within this study relate to abatement, inspections, and removal of graffiti. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Code Enforcement Department.
1 Fee Schedule Modifications
In discussion with Code Compliance staff, modifications were made to the current fee schedule. The modifications made are outlines below:

• Eliminated Fee: Bee Removal was removed , as these services are no longer provided by the department.

• Fee Name Changes: Notice of Non-Compliance was changed to Notice of Pendency and Graffiti Documentation was changed to Graffiti Removal. Both were changed as a means to provide City staff and the Community with clarity as to what the services entails.

These modifications enable the Department to most accurately and transparently reflect all of the services it provides.
2 Detailed Results
Code Enforcement collects fees for abatement, inspections, and removal of graffiti. The total cost calculated for each service includes direct staff costs and Departmental and Citywide overhead. The following table details the title / name, current fee, total cost, and surplus or deficit associated with each Code Enforcement activity.

Table 9: Total Cost Per Unit Results – Code Enforcement

Fee Name Current Fee
Total Cost
Per Unit
Surplus /
(Deficit) per Unit
Vacant Lot Weed Abatement $126 $438 ($312)
Weed Abatement Appeal to City Council $655 $665 ($10)
Foreclosed Property Registration/Inspection $75 $126 ($51) Each inspection after 1st inspection $35 $126 ($91)
Summary Abatement Actual Cost
Notice of Pendency $25 $124 ($99)

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Fee Name Current Fee
Total Cost
Per Unit
Surplus /
(Deficit) per Unit
Graffiti Removal Actual Cost
Hourly Rate $111 $188 ($77)

Currently, all fees being charged are showing an under-recovery. The deficits range from a low of $10 for Weed Abatement Appeal to City Council, to a high of $312 for Vacant Lot Weed Abatement. In this case, these subsidies represent a good faith gesture by the City to balance enforcement of City Code with compliance. Overall, the Code Enforcement Department is recovering an average of 49% of its per unit costs.

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9. Police

The Police Department is responsible for law enforcement , as a means to ensure the safety of residents and visitors within the City of Menifee. The fees examined within this study relate to copies of reports, Clearance Letters and signoffs, LiveScan Fingerprinting, impound charges, and personnel services. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Police Department.
1 Fee Schedule Modifications
During discussions with Police Department staff, only one change was made to the current fee structure. A fee for Noise Ordinance Violation was added. The addition of the new fee enables the Department to most accurately and transparently reflect all of the services it provides.
2 Detailed Results
The Police Department collects fees for copies of reports, letters of clearance and signoffs, fingerprinting, impound charges, and personnel services. The total cost calculated for each service includes direct staff costs, direct material costs (where applicable), and Departmental and Citywide overhead. The following table details the title / name, current fee, total cost, and surplus or deficit associated with each Police permit.

Table 10: Total Cost Per Unit Results – Police

Fee Name Current Fee
Total Cost
Per Unit
Surplus /
(Deficit) per Unit
Police Reports
Per Report (Crimes, Collisions, and CAD Printouts) $18 $39 ($21) Media Duplication
Flash Drive, CD, DVD, or Email regardless of volume $20 $374 ($354) Clearance Letters
Police Clearance $20 $28 ($8)
Citation Sign Offs
Menifee PD Citation or Outside Agency Citation $15 $38 ($23) Concealed Weapons Permit
Initial Application Processing $100 $535 ($435)
Renewals $25 $535 ($510)
Updates $10 $535 ($525)

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Fee Name Current Fee
Total Cost
Per Unit
Surplus /
(Deficit) per Unit
Livescan11
Rolling Fee $25 $34 ($9)
Vehicle Identification Number (VIN)
VIN Verification Charge (Individuals Only) $25 $34 ($9) Stored or Impounded Vehicles
Vehicle Release (Stored) $100 $201 ($101)
Vehicle Release (Impounded or DUI) $150 $201 ($51)
Abandoned $100 $201 ($101)
Vehicle Repossession
Vehicle Repossession Fee12 $15 $15 $0
Subpoenas
Admin Fee per Subpoena13 $15 $15 $0
Witness Fee – Deposit14 $275 $275 $0
DUI Emergency Response
Emergency Response to DUI Investigations15 Actual Cost
Noise Ordinance Actual Cost
Sworn Personnel Services
Special Events, 4 Hour Minimum
Lieutenant – per hour Actual Cost $217
Sergeant – per hour Actual Cost $194
Officer – per hour Actual Cost $167
Community Service Officer – per hour Actual Cost $153

The majority of the fees charged by the Police Department are set by the state, the remaining fee show an under-recovery. Subsidies range from a low of $8 for Clearance Letters, to a high of $525 for Updates to a Concealed Weapons Permit. While the witness fee noted above shows a deposit of $275, the City should charge actual cost for those services. Overall, the Police department is recovering an average of 42% of its per unit costs.

11 LiveScan Fees vary depending on the purpose of the livescan (employment, immigration, etc.) and who is requesting the livescan. The most recent link describing the State / Federal fees is as follows:
https://oag.ca.gov/sites/all/files/agweb/pdfs/fingerprints/forms/fees.pdf 12 The Vehicle Repossession Fee is se t per Government Code 4161 2 13 The Admin Fee per Subpoena is set per Evidence Code 1563(b)(6) 14 The Witness Fee is set per Government Code 68097.2(b) 15 The Emergency Response to DUI Investigations is set per Government Code 5315 0

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10. Fire

The Fire Department is responsible for keeping residents safe by providing suppression services to mitigate fires and other disasters as well as prevention services to monitor and regulate high risk fire hazards. Fire services are contracted and provided by Cal Fire / Riverside County Fire. Fees examined in this study relate to Prevention services such as Fire Sprinkler Systems, Fire Alarms, Hazardous Materials, Storage Tanks, and New Construction. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Fire Department. 1 Fee Schedule Modifications
During discussions with Fire staff, modifications were proposed to the current fee schedule, which include:
• Removal of fees: The Standpipe/Hose Valves Water Systems Permit and Annexation Agreement were removed as Fire staff no longer provides these services. Revised Tentative Parcel Map was also removed from the Fire schedule as this service is provided by Engineering.

• Expansion of fees: New 13,13R Fire Sprinkler System was previously charged as a flat plan check fee and a per sprinkler head inspection fee. This was adjusted and split out based on the number of sprinkler heads and an additional per sprinkler head fee. Additionally, battery systems was separated into residential and commercial.

• Condensing of fees: Fees were condensed to reflect current services being provided, which include:

- New Alarm Systems – Per Device: previously had ranges for 0-999, 1000 - 5000, and 5000+ devices. This was combined into one per device fee.

- Solar Photovoltaic System : previously this was separated into three fees:

Solar Photovoltaic Residential, Solar Photovoltaic Commercial Up to 50kW, and Solar Photovoltaic Commercial Greater than 50kW. This has now been condensed down into one fee for Solar Photovoltaic System Plan Check and Inspection.

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- Refrigeration System: previously this was separated into two fees: less than 500 lbs and greater or equal to 500 lbs. This was combined into one flat Refrigeration System fee.

• Addition of fees: Fees were added to reflect current services being provided, which include: Low Pressure Tracts for Fire Sprinkler systems, Fire Hydrant/Water Flow Witness Water Systems Permit, FACP Modification, Generator, Battery Systems Facilities, CO2 System, Fire Lane Plan Check and Inspection, Fuel Modification Inspection, Drilling / Blasting Permit – Initial, Emergency Evacuation, Certificate of Occupancy Inspection, Defensible Space Inspections, Lost Card Job Fee, Fire Life- Safety Inspection (Post-Development) , and Annual Inspection permits to match the Current California Fire Code.

• Restructuring of Inspection Costs: The base fee for all fire sprinkler systems and fire alarms previously only included time for plan check. It was discussed with the department that this initial base fee should also include inspection time. As such, new fees have been added to the fire sprinkler permits and fire alarm permits for inspection time on the base permit fee.

• Reclassification of Fees: The Annual Life Safet y Inspections were previously charges based on the type of occupancy and square footage. This was combined into one main category (All occupancies other than R) and broken out into a large square footage scale to more accurately reflect time to inspect by size of the occupancy.

The modifications outlined will ensure that the Fire fee schedule accurately reflects the services being provided by staff and help ensure that costs are captured appropriately. 2 Detailed Results – Plan Check
The Fire Department collects plan check fees for items such as fire sprinklers, fire alarms, hazardous materials, high piled storage, and storage tanks. The total cost calculated for each service includes direct staff costs and Departmental and Citywide overhead. The following table details the title / name, current fee, total full cost associated with plan review only, and the surplus or deficit associated with each service.

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Table 11: Total Cost Per Unit Results – Fire Plan Check

Fee Name
Current
Fee
Plan Check
Cost Per Unit
Surplus /
(Deficit) per Unit
Fire Sprinkler Systems
New 13, 13R Fire Sprinkler System
Up to 250 sprinkler heads New $233 N / A
251 to 500 sprinkler heads $336 $350 ($14)
500+ sprinkler heads $673 $700 ($27)
New 13D Residential Fire Sprinkler System (Base fee Per Model) $336 $350 ($14)
New 13D Residential Fire Sprinkler System – Low Pressure Tract (Per Phase) New $233 N / A
TI 13, 13R Fire Sprinkler System $504 $350 $154
TI 13D Residential Fire Sprinkler System $238 $233 $5 Water System Permits
New Underground Fire Line $336 $467 ($131)
Fire Pump (Per Pump) $617 $642 ($25)
Emergency Underground Fire Line Repair $336 $350 ($14) Above Ground Tank (Temporary Water
Supply/Construction) $336 $350 ($14)
Fire Alarm
New Alarm System $673 $700 ($27)
TI Fire Alarm System $504 $525 ($21)
FACP Modification New $233 N / A
Water Flow (Monitoring) Alarm System Only $224 $233 ($9) Fire Protection Systems
Special Extinguishing Systems (FM200, Dry Chem, Spray
Mist, etc.) (Per system) $561 $583 ($22)
Smoke Control System-Rationale, Analysis and Plan Review $1,345 $1,400 ($55) Other Systems
Hood & Duct Automatic Extinguishing System (Per system) $224 $233 ($9) Ovens, Industrial baking or drying, furnace or kiln Special Equipment (Per oven) $170 $175 ($5)
Dust Collection Special Equipment (Per system) $224 $350 ($126) Solar Photovoltaic System Plan Check and Inspection $224 $233 ($9) Refrigeration System $224 $233 ($9)
Spray Booths (Per Booth/System) $224 $350 ($126)
Liquified Petroleum Gases (LPG) Special System (Per
System) $336 $350 ($14)
Gas Systems (Med Gas, Industrial Gas, LPG) (Per System) $336 $350 ($14) Emergency Responder Radio Coverage (Per System) $224 $233 ($9) Generator – Cell Sites (Per Gen/Site) $573 $350 $233
Generator New $350 N / A
Battery Systems
Residential $573 $350 $233
Commercial $573 $583 ($10)
Battery Systems Facilities New $934 N / A
CO2 System New $233 N / A
Hazardous Materials
Chemical Classification Disclosure Review
<10 Chemicals $336 $350 ($14)
10-25 Chemicals $448 $467 ($19)

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Fee Name
Current
Fee
Plan Check
Cost Per Unit
Surplus /
(Deficit) per Unit
26-100 Chemicals $765 $817 ($52)
>100 Chemicals $1,051 $1,109 ($58)
High Piled Storage
High Piled Combustible Storage
Up to 12,000 square feet $448 $467 ($19)
12,001-50,000 square feet $673 $700 ($27)
50,001-100,000 square feet $785 $817 ($32)
>100,000 square feet $1,009 $1,050 ($41)
Access and Water Supply
Access and Water Supply Only – Commercial Construction
Inspection $224 $233 ($9)
Fire Lane Plan Check and Inspection New $117 N / A
Tanks
Underground Storage Tanks Install or Removal $224 $233 ($9) Aboveground Storage Tank Install or Removal $224 $233 ($9) Alterations to Gas Stations (No tank alterations) $224 $233 ($9) Other Fees
Alternative Materials and Methods (4 hour minimum, hourly thereafter) $897 $700 $197
3rd Review and subsequent submittals (Per Hour) $336 $233 $103 Expedited/Overtime Plan Review (Per Hour) $336 $350 ($14) Over the Counter/Misc. Revisions Plan Review (Per Plan
Review) $168 $175 ($7)
Drilling / Blasting Permit – Initial New $233 N / A
Landscape Plan Review – Fuel Modification Plan $897 $934 ($37) Special Events
Special Event Permit New $175 N / A
Special Event Permit – With tents and or canopies > 400 square feet New $233 N / A
Hourly Rates
Plan Review $224 $233 ($9)
Supplemental plan review (Per 1 hour or portion thereof) $224 $233 ($9) New Fees:

Emergency Evacuation New $350 N / A
Lost Job Card Fee New $58 N / A

The majority of Fire Plan Check fees are under recovering with the largest source of under-recovery of $131 from New Underground Fire Lines. Over-recoveries range from $5 for TI 13D Residential Fire Sprinkler Systems to a high of $233 for Generator – Cell Sites and Battery Systems – Residential.
3 Detailed Results – Inspection
The Fire Department collects inspection fees for items such as fire sprinklers, fire alarms, hazardous materials, high piled storage, and storage tanks. The total cost calculated for each service includes direct staff costs, Departmental and Citywide overhead. The

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following table details the title / name, current fee, total full cost associated with inspection only, and the surplus or deficit associated with each service.

Table 12: Total Cost Per Unit Results – Total Fire Inspection

Fee Name
Current
Fee
Inspection
Cost Per Unit
Surplus /
(Deficit) per Unit
Fire Sprinkler Systems
New 13, 13R Fire Sprinkler System
Up to 250 sprinkler heads New $221 N / A
251 to 500 sprinkler heads New $331 N / A
500+ sprinkler heads New $662 N / A
Per sprinkler head $9 $9 $0
New 13D Residential Fire Sprinkler System
Base Fee New $221 N / A
Per Sprinkler Head $9 $9 $0
New 13D Residential Fire Sprinkler System – Low
Pressure Tract – per phase
Base Fee New $221 N / A
Per Sprinkler Head $9 $9 $0
TI 13, 13R Fire Sprinkler System
Base Fee New $221 N / A
Per Sprinkler Head $9 $9 $0
TI 13D Residential Fire Sprinkler System
Base Fee New $221 N / A
Per Sprinkler Head $9 $9 $0
Water System Permits
New Underground Fire Line $392 $662 ($270)
Fire Pump (Per Pump) $897 $883 $14
Emergency Underground Fire Line Repair $617 $607 $10
Fire Hydrant/Water Flow Witness New $221 N / A
Above Ground Tank (Temporary Water
Supply/Construction) $336 $331 $5
Fire Alarm
New Alarm System
Base Fee New $442 N / A
Per Device $9 $9 $0
TI Fire Alarm System
Base Fee New $221 N / A
Per initiating or notification device $9 $9 $0
FACP Modification New $221 N / A
Water Flow (Monitoring) Alarm System Only $224 $221 $3 Fire Protection Systems
Special Extinguishing Systems (FM200, Dry Chem, Spray
Mist, etc.) (Per system) $336 $331 $5
Smoke Control System-Rationale, Analysis and Plan
Review $1,233 $1,325 ($92)
Other Systems
Hood & Duct Automatic Extinguishing System (Per
system) $336 $331 $5
Ovens, Industrial baking or drying, furnace or kiln Special Equipment (Per oven) $245 $221 $24

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Fee Name
Current
Fee
Inspection
Cost Per Unit
Surplus /
(Deficit) per Unit
Dust Collection Special Equipment (Per system) $245 $331 ($86) Solar Photovoltaic System Plan Check and Inspection New $221 N / A Refrigeration System $224 $331 ($107)
Spray Booths (Per Booth/System) $383 $386 ($3)
Liquified Petroleum Gases (LPG) Special System (Per
System) $450 $442 $8
Gas Systems (Med Gas, Industrial Gas, LPG) (Per
System) $392 $386 $6
Emergency Responder Radio Coverage (Per System) $448 $221 $227 Generator – Cell Sites (Per Gen/Site) $452 $221 $231
Generator New $221 N / A
Battery Systems
Residential $112 $221 ($109)
Commercial $112 $331 ($219)
Battery Systems Facilities New $773 N / A
CO2 System New $221 N / A
Hazardous Materials
Chemical Classification Disclosure Review
<10 Chemicals $224 $221 $3
10-25 Chemicals $336 $331 $5
26-100 Chemicals $478 $442 $36
>100 Chemicals $668 $662 $6
High Piled Storage
High Piled Combustible Storage
Up to 12,000 square feet $336 $331 $5
12,001-50,000 square feet $448 $442 $6
50,001-100,000 square feet $673 $662 $11
>100,000 square feet $785 $773 $12
Access and Water Supply
Access and Water Supply Only
Commercial Construction Inspection $336 $221 $115
Residential Construction Inspection – One Lot $186 $166 $20 Each Additional Lot $38 $33 $5
Fire Lane Plan Check and Inspection New $110 N / A
Fuel Modification Inspection New $221 N / A
Tanks
Underground Storage Tanks Install or Removal $224 $221 $3 Aboveground Storage Tank Install or Removal $224 $221 $3 Alterations to Gas Stations (No tank alterations) $224 $221 $3 Other Fees
Work without Approval or Permit $336 $331 $5
Fire Stand-by $224 $221 $3
Alternative Materials and Methods (4 hour minimum,
hourly thereafter) New $221 N / A
Drilling / Blasting Permit – Initial New $221 N / A
Renewable Permit Fees (Issued at Annual Fire-Life
Safety Inspection (105 Permits)
Aerosol Products (Level 2 & 3) $85 $110 ($25)
Amusement Building $287 $166 $121
Aviation Facilities New $221 N / A
Cellulose Nitrate Storage $85 $110 ($25)

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Fee Name
Current
Fee
Inspection
Cost Per Unit
Surplus /
(Deficit) per Unit
Combustible Dust Producing Operations $119 $110 $9
Combustible Fiber Storage $191 $166 $25
Compressed Gases $191 $221 ($30)
Covered and open mall buildings $280 $276 $4
Cryogenic Fluids $191 $221 ($30)
Cutting and Welding $95 $110 ($15)
Dry Cleaning $287 $221 $66
Exhibits and Trade Shows New $221 N / A
Explosives $450 $442 $8
Fire Hydrants and Valves $119 $110 $9
Flammable and Combustible Liquids $142 $166 ($24)
Floor Finishing New $110 N / A
Fruit and Crop Ripening New $110 N / A
Fumigation and Insecticidal Fogging New $110 N / A
Hazardous Materials $191 $221 ($30)
HPM Facilities New $166 N / A
High Piled Combustible Storage <12,000 Square Feet $191 $166 $25 High Piled Combustible Storage 12,001-50,000 Square
Feet $478 $442 $36
High Piled Combustible Storage >100,000 Square Feet $765 $773 ($8) Hot Work Operation New $110 N / A
Industrial Ovens $119 $110 $9
Lumber Yard/Woodworking Plants $253 $221 $32
Liquid or gas-fueled vehicles or equipment in assembly
buildings $191 $110 $81
LP-gas $95 $166 ($71)
Magnesium $95 $110 ($15)
Miscellaneous Combustible Storage $191 $221 ($30)
Mobile Food Preparation Vehicles New $110 N / A
Motor Fuel Dispensing Facilities $119 $166 ($47)
Open Burning New $110 N / A
Open Flames and Torches $85 $110 ($25)
Open Flames and Candles $85 $110 ($25)
Organic Coatings New $166 N / A
Outdoor Assembly Events (see special events)
Places of Assembly $85 $166 ($81)
Plant Extraction Systems New $221 N / A
Private Fire Hydrant New $110 N / A
Pyrotechnic special effects material (see fireworks
display)
Proxylin Plastics New $110 N / A
Refrigeration Equipment $191 $221 ($30)
Repair Garages and Motor Fuel- Dispensing Facilities $238 $386 ($148) Rooftop Heliports New $166 N / A
Spraying or Dipping Operations $85 $110 ($25)
Storage of scrap tires and tire byproducts $119 $110 $9 Temporary membrane structures and tents (see special
events)
Tire-Rebuilding Plants $119 $110 $9
Waste Handling New $166 N / A
Wood Products $119 $147 ($28)

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Fee Name
Current
Fee
Inspection
Cost Per Unit
Surplus /
(Deficit) per Unit
CO2 Dispensing System New $92 N / A
CO2 Enrichment New $110 N / A
Gas Detection New $221 N / A
Energy Storage Systems New $331 N / A
Special Events
Special Event Permit $224 $221 $3
Special Event Permit – With tents and or canopies > 400 square feet $336 $331 $5
Carnivals and Fairs $316 $331 ($15)
Fireworks Displays $415 $442 ($27)
Film Making New $442 N / A
Annual Life Safety Inspections – All Occupancies other than R16 <3,600 Square Feet Varies $221 N / A
3,600 – 25,000 Square Feet Varies $386 N / A
25,000 – 50,000 Square Feet Varies $552 N / A
50,001 – 350,000 Square Feet Varies $607 N / A
>350,000 Square Feet Varies $1,159 N / A
Fire Life-Safety Inspections (Post-Development)
Fire annual Inspection (includes one re-inspection) New $221 N / A 2nd re-inspection New $442 N / A
3rd and subsequent re-inspections New $662 N / A
Fire Watch Inspection (Per Hour) New $221 N / A
R-1 Occupancies i.e. Hotels, Motels
<25 units $617 $607 $10
26-50 units $729 $717 $12
51-75 units $897 $883 $14
76-100 units $1,009 $993 $16
>100 units $1,177 $1,159 $18
R-2 (Apartment, Residential Permanent 3+)
3-16 units New $331 N / A
17-25 units New $552 N / A
26-50 units New $717 N / A
51-75 units New $883 N / A
76-100 units New $993 N / A
>100 units New $1,159 N / A
Per additional 10 units New $37 N / A
R-2.1/R-4 Occupancies
Care Facility Residential State Licenses-6 or less Re-
Inspection Fee $224 $221 $3
Care Facility Commercial 0-50 State Licensed $392 $386 $6 Care Facility Commercial 51-99 State Licensed $504 $497 $7 Care Facility Commercial 100-150 State Licensed $617 $607 $10 Care Facility Commercial ≥151 State Licensed $785 $773 $12 Day Care Facilities Residential 8-14 Fire Clearance $224 $221 $3 Day Care Facility Commercial 0-50 $168 $166 $2
Day Care Facility Commercial 51-100 $224 $221 $3
Day Care Facility Commercial 101-150 $336 $331 $5
Day Care Facility Commercial >150 $392 $386 $6
2nd re-inspection fee (after initial and first inspection) $336 $331 $5

16 Annual Life Safety Inspections fee structure was modified and current fees vary based upon the type of occupancy.

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Fee Name
Current
Fee
Inspection
Cost Per Unit
Surplus /
(Deficit) per Unit
2nd re-inspection penalty $448 $442 $6
3rd plus re-inspection penalty $561 $552 $9
Hourly Rates
Inspection $224 $221 $3
Supplemental inspection fee (Per 1 hour or portion
thereof) $224 $221 $3
After Hours or emergency Call-Out (2hr. Minimum =
$448) $224 $221 $3
Other-Construction re-inspection fee $224 $221 $3
Other Fees:

Certificate of Occupancy Inspection New $166 N / A
Emergency Evacuation New $221 N / A
Defensible Space Inspections New $221 N / A
Non-Compliance Fee/Complaint Investigation Actual Costs

The majority of Fire Inspection fees are over-recovering with the highest source of over- recovery being $231 for Generator – Cell Sites. The fees with an under-recovery range from $3 for Spray Booths to $270 for New Underground Fire Line. The primary reason for the majority of fees showing an over-recovery is due to the hourly rate for inspection services. The previous rate was $3 higher than the new calculated hourly rate for inspection services. The new rate is based only on the inspectors, whereas, the previous analysis utilized a blended rate between plan check and inspection for both plan check and inspections services.
4 Detailed Results – Total Plan Check and Inspection
While the two previous sections outlined the total cost for plan check and inspection separately, the following table details the title / name, current fee, total full cost associated with Fire to both plan check and inspect, and the surplus or deficit associated with each service.

Table 13: Total Cost Per Unit Results – Total Fire Plan Check and Inspection Costs

Fee Name
Current
Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
Fire Sprinkler Systems
New 13, 13R Fire Sprinkler System
Up to 250 sprinkler heads New $454 N / A
251 to 500 sprinkler heads $336 $681 ($345)
500+ sprinkler heads $673 $1,362 ($689)
Per sprinkler head $9 $9 $0
New 13D Residential Fire Sprinkler System
Base Fee $336 $571 ($235)
Per sprinkler head $9 $9 $0
New 13D Residential Fire Sprinkler System – Low
Pressure Tract – Per Phase

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Fee Name
Current
Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
Base Fee New $454 N / A
Per sprinkler head New $9 N / A
TI 13, 13R Fire Sprinkler System
Base Fee $504 $571 ($67)
Per sprinkler head $9 $9 $0
TI 13D Residential Fire Sprinkler System
Base Fee $238 $454 ($216)
Per sprinkler head $9 $9 $0
Water System Permits
New Underground Fire Line $728 $1,129 ($401)
Fire Pump (Per Pump) $1,514 $1,525 ($11)
Emergency Underground Fire Line Repair $953 $957 ($4)
Fire Hydrant/Water Flow Witness New $221 N / A
Above Ground Tank (Temporary Water
Supply/Construction) $672 $681 ($9)
Fire Alarm
New Alarm System
Base Fee $673 $1,142 ($469)
Per Device $9 $9 $0
TI Fire Alarm System
Base Fee $504 $746 ($242)
Per initiating or notification device $9 $9 $0
FACP Modification New $454 N / A
Water Flow (Monitoring) Alarm System Only $448 $454 ($6) Fire Protection Systems
Special Extinguishing Systems (FM200, Dry Chem, Spray
Mist, etc.) (Per system) $897 $915 ($18)
Smoke Control System-Rationale, Analysis and Plan
Review $2,578 $2,725 ($147)
Other Systems
Hood & Duct Automatic Extinguishing System (Per
system) $560 $565 ($5)
Ovens, Industrial baking or drying, furnace or kiln Special Equipment (Per oven) $415 $396 $19
Dust Collection Special Equipment (Per system) $469 $681 ($212) Solar Photovoltaic System Plan Check and Inspection $224 $454 ($230) Refrigeration System $448 $565 ($117)
Spray Booths (Per Booth/System) $607 $736 ($129)
Liquified Petroleum Gases (LPG) Special System (Per
System) $786 $792 ($6)
Gas Systems (Med Gas, Industrial Gas, LPG) (Per
System) $728 $736 ($8)
Emergency Responder Radio Coverage (Per System) $672 $454 $218 Generator – Cell Sites (Per Gen/Site) $1,025 $571 $454 Generator New $571 N / A
Battery Systems
Residential – Per System $685 $571 $114
Commercial – Per System $685 $915 ($230)
Battery Systems Facilities New $1,706 N / A
CO2 System New $454 N / A
Hazardous Materials

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Fee Name
Current
Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
Chemical Classification Disclosure Review
<10 Chemicals $560 $571 ($11)
10-25 Chemicals $784 $798 ($14)
26-100 Chemicals $1,243 $1,258 ($15)
>100 Chemicals $1,719 $1,771 ($52)
High Piled Storage
High Piled Combustible Storage
Up to 12,000 square feet $784 $798 ($14)
12,001-50,000 square feet $1,121 $1,142 ($21)
50,001-100,000 square feet $1,458 $1,479 ($21)
>100,000 square feet $1,794 $1,823 ($29)
Access and Water Supply
Commercial Construction Inspection $560 $454 $106
Residential Construction Inspection – One Lot $186 $166 $20 Residential Construction – Each Additional Lot $38 $33 $5 Fire Lane Plan Check and Inspection New $227 N / A
Fuel Modification Inspection New $221 N / A
Tanks
Underground Storage Tanks Install or Removal $448 $454 ($6) Aboveground Storage Tank Install or Removal $448 $454 ($6) Alterations to Gas Stations (No tank alterations) $448 $454 ($6) Other Fees
Work without Approval or Permit $336 $331 $5
Fire Stand-by $224 $221 $3
Alternative Materials and Methods (4 hour minimum,
hourly thereafter) $897 $921 ($24)
Consultant Fire Plan Review Actual Costs
3rd Review and subsequent submittals (Per Hour) $336 $233 $103 Expedited/Overtime Plan Review (Per Hour) $336 $350 ($14) Over the Counter/Misc. Revisions Plan Review (Per Plan
Review) $168 $175 ($7)
Drilling / Blasting Permit – Initial New $454 N / A
Landscape Plan Review – Fuel Modification Plan $897 $934 ($37) Renewable Permit Fees (Issued at Annual Fire-Life Safety Inspection (105 Permits) Aerosol Products (Level 2 & 3) $85 $110 ($25)
Amusement Building $287 $166 $121
Aviation Facilities New $221 N / A
Cellulose Nitrate Storage $85 $110 ($25)
Combustible Dust Producing Operations $119 $110 $9
Combustible Fiber Storage $191 $166 $25
Compressed Gases $191 $221 ($30)
Covered and open mall buildings $280 $276 $4
Cryogenic Fluids $191 $221 ($30)
Cutting and Welding $95 $110 ($15)
Dry Cleaning $287 $221 $66
Exhibits and Trade Shows New $221 N / A
Explosives $450 $442 $8
Fire Hydrants and Valves $119 $110 $9
Flammable and Combustible Liquids $142 $166 ($24)
Floor Finishing New $110 N / A
Fruit and Crop Ripening New $110 N / A

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Fee Name
Current
Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
Fumigation and Insecticidal Fogging New $110 N / A
Hazardous Materials $191 $221 ($30)
HPM Facilities New $166 N / A
High Piled Combustible Storage <12,000 Square Feet $191 $166 $25 High Piled Combustible Storage 12,001-50,000 Square
Feet $478 $442 $36
High Piled Combustible Storage >100,000 Square Feet $765 $773 ($8) Hot Work Operation New $110 N / A
Industrial Ovens $119 $110 $9
Lumber Yard/Woodworking Plants $253 $221 $32
Liquid or gas-fueled vehicles or equipment in assembly
buildings $191 $110 $81
LP-gas $95 $166 ($71)
Magnesium $95 $110 ($15)
Miscellaneous Combustible Storage $191 $221 ($30)
Mobile Food Preparation Vehicles New $110 N / A
Motor Fuel Dispensing Facilities $119 $166 ($47)
Open Burning New $110 N / A
Open Flames and Torches $85 $110 ($25)
Open Flames and Candles $85 $110 ($25)
Organic Coatings New $166 N / A
Outdoor Assembly Events (see special events)
Places of Assembly $85 $166 ($81)
Plant Extraction Systems New $221 N / A
Private Fire Hydrant New $110 N / A
Pyrotechnic special effects material (see fireworks
display)
Proxylin Plastics New $110 N / A
Refrigeration Equipment $191 $221 ($30)
Repair Garages and Motor Fuel- Dispensing Facilities $238 $386 ($148) Rooftop Heliports New $166 N / A
Spraying or Dipping Operations $85 $110 ($25)
Storage of scrap tires and tire byproducts $119 $110 $9 Temporary membrane structures and tents (see special
events)
Tire-Rebuilding Plants $119 $110 $9
Waste Handling New $166 N / A
Wood Products $119 $147 ($28)
CO2 Dispensing System New $92 N / A
CO2 Enrichment New $110 N / A
Gas Detection New $221 N / A
Energy Storage Systems New $331 N / A
Special Events
Special Event Permit $224 $396 ($172)
Special Event Permit – With tents and or canopies > 400 square feet $336 $565 ($229)
Carnivals and Fairs $316 $331 ($15)
Fireworks Displays $415 $442 ($27)
Film Making New $442 N / A
Annual Life Safety Inspections – All Occupancies other than R17

17 Annual Life Safety Inspections fee structure was modified and current fees vary based upon the type of occupancy.

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Fee Name
Current
Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
<3,600 Square Feet Varies $221 N / A
3,600 – 25,000 Square Feet Varies $386 N / A
25,000 – 50,000 Square Feet Varies $552 N / A
50,001 – 350,000 Square Feet Varies $607 N / A
>350,000 Square Feet Varies $1,159 N / A
Fire Life-Safety Inspections (Post-Development)
Fire annual Inspection (includes one re-inspection) New $221 N / A 2nd re-inspection New $442 N / A
3rd and subsequent re-inspections New $662 N / A
Fire Watch Inspection (Per Hour) New $221 N / A
R-1 Occupancies i.e. Hotels, Motels
<25 units $617 $607 $10
26-50 units $729 $717 $12
51-75 units $897 $883 $14
76-100 units $1,009 $993 $16
>100 units $1,177 $1,159 $18
R-2 (Apartment, Residential Permanent 3+)
3-16 units New $331 N / A
17-25 units New $552 N / A
26-50 units New $717 N / A
51-75 units New $883 N / A
76-100 units New $993 N / A
>100 units New $1,159 N / A
Per additional 10 units New $37 N / A
R-2.1/R-4 Occupancies
Care Facility Residential State Licenses-6 or less Re-
Inspection Fee $224 $221 $3
Care Facility Commercial 0-50 State Licensed $392 $386 $6 Care Facility Commercial 51-99 State Licensed $504 $497 $7 Care Facility Commercial 100-150 State Licensed $617 $607 $10 Care Facility Commercial ≥151 State Licensed $785 $773 $12 Day Care Facilities Residential 8-14 Fire Clearance $728 $746 ($18) Day Care Facility Commercial 0-50 $168 $166 $2
Day Care Facility Commercial 51-100 $224 $221 $3
Day Care Facility Commercial 101-150 $336 $331 $5
Day Care Facility Commercial >150 $392 $386 $6
2nd re-inspection fee (after initial and first inspection) $336 $331 $5 2nd re-inspection penalty $448 $442 $6
3rd plus re-inspection penalty $561 $552 $9
Hourly Rates
Inspection $224 $221 $3
Plan Review $224 $233 ($9)
Supplemental inspection fee (Per 1 hour or portion
thereof) $224 $221 $3
Supplemental plan review (Per 1 hour or portion thereof) $224 $233 ($9) After Hours or emergency Call-Out (2hr. Minimum =
$448) $224 $221 $3
Other-Construction re-inspection fee $224 $221 $3
Other Fees:

Certificate of Occupancy Inspection New $166 N / A
Emergency Evacuation New $571 N / A

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Fee Name
Current
Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
Lost Job Card Fee New $58 N / A
Defensible Space Inspections New $221 N / A
Non-Compliance Fee/Complaint Investigation Actual Costs

The majority of Fire fees are over-recovering for plan check and inspection services. The largest source of over-recovery is $454 for Generator – Cell Sites. The fees that are under- recovering range from a low of $4 for Emergency Underground Fire Line Repair and a high of $689 for New 13, 13R Fire Sprinkler Systems with 500+ sprinkler heads. 5 Cross-Departmental Support
The Fire Department also conducts reviews and inspections on behalf of Planning, Engineering, and Building. The cost for Fire’s support has been incorporated into those fees either within the fee charged by the Department or as a separate line ite m on those departments’ respective fee schedules.

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11. Building

The Building and Safety Department is responsible for providing plan check and inspection services on all building and construction within the City to establish safety for residents by ensuring all buildings comply with California building codes and regulations.

Fees included in this analysis are in relation to structural, mechanical, electrical, plumbing plan checks, and inspections. The following subsections discuss fee schedule modifications, and detailed per unit results for the fee-related services provided by the Building Department.
1 Fee Schedule Modifications
During discussions with Building staff, modifications were proposed to the current fee schedule, which include:
• Flat Fee Changed to State Set Fee Structure: Previously, the department charged a flat fee for Solar Permits and charged Plan Check of Solar Permit on a per hour basis. It was decided by the Department that it would better reflect solar permit services to mimic the state set structure and fees. As such, these permit fees were removed and replaced with the state set structure and maximum allowable fees for Solar Permits.

• Expansion of fees: Certain fees have been broken out into multiple categories to better account and specify services offered.
- The singular reroof fee has been split into a residential and commercial fee to account for the different level of services provided to each category.
- In addition, as mentioned in the previous point, solar permit were previously charged as a flat fee plus a per hour plan check. This structure has been expanded to mimic the state set fee structure with a base per residential and commercial permits and a plus each additional kilo watt hour.

• Addition of Fees : Three fees were added in order to accommodate an easier method of charging simple and low costs projects that were previously evaluated on the valuation of the project. New flat fees were developed for Kitchen and/or Bathroom Remodels, and Windows/Doors – Per window/door. These additions could be made due to the level of services for these fees not being dependent on

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the project value and since they take about the same amount of time for staff to complete regardless of project size.

• Expansion of Valuation Based fees : The City’s current New Building Permit Fee calculation takes .0046 times the project valuation. However, it was determined that this singular calculation does not accurately calculate fees for all projects, and as such two valuation tables were developed: one for single family and one for non-residential projects. These tables will allow a greater nexus between staff level of effort and permit fees.

• Combination Permits / Fees: The City’s current process involves charging a Building Permit Fee, a Plan Check Fee, and then a separate mechanical, electrical, and plumbing fee for each fixture. This is cumbersome and also does not result in a transparent fee schedule. Therefore, through this study it was proposed that the new building permit fee would capture all Building (Structural), Mechanical, Electrical, and Plumbing, and the fixture fees would only be used in the case of standalone permits.

The modifications outlined above will ensure that the Building fee schedule accurately reflects the services being provided by staff and help ensure that costs are captured appropriately.
2 Detailed Results – Flat Fees
The Building Department collects flat fees for permits such as demolitions, swimming pools, reroofs, electrical, mechanical, and plumbing. The total cost calculated for each service includes direct staff costs, cross-departmental support (i.e. Planning, and Engineering), Departmental and Citywide overhead. The following table details the title / name, current fee, total full cost associated with providing these services, and the surplus or deficit associated with each service.

Table 14: Total Cost Per Unit Results – Building Flat Fees

Fee Name
Current
Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
Building Permit Fees
Permit Issuance $27 $78 ($51)
Demolition $140 $378 ($238)
Wall/Fence, City Standard $93 $82 $11
Wall/Fence, Non-City Standard $133 $164 ($31)
Deck/Patio, City Standard $93 $110 ($17)
Deck/Patio, Non-City Standard $133 $164 ($31)
Swimming Pool/In-Ground Spa $467 $532 ($65)

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Fee Name
Current
Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
Reroof
Residential $98 $110 ($12)
Commercial $98 $164 ($66)
Duplicate Inspection Card $21 $13 $8
Duplicate Certificate of Occupancy $21 $78 ($57)
Kitchen and / or Bath Remodel New $566 N / A
Windows / Doors
Up to 5 windows / doors New $82 N / A
Each additional 5 windows / doors New $27 N / A
Misc. Permit $98 $164 ($66)
Inspections not specified $98 $164 ($66)
Re-inspections $98 $164 ($66)
After Hours Inspections (4 hours minimum) $118 $190 ($73) Electrical Permit Fees
Permit Issuance $27 $78 ($51)
Residential Appliance, up to 1 HP $116 $82 $34
Non-Residential Appliances, up to 1 HP $116 $82 $34
Power Apparatus, less than 100 HP, KW, KVA, or KVAR $150 $82 $68 Power Apparatus, 100+ HP, KW, KVA, or KVAR $183 $82 $101 Temporary Power Pole $67 $82 ($15)
Services, Switchboards, Control Centers, & Panels
Up to 400 amps for Single Family Residence $116 $82 $34 Up to 400 amps for Non-Single Family Residence $183 $82 $101 400+ amps $283 $164 $119
Receptacle, Switch, Outlet, & Fixture, first $116 $68 $48 Receptacle, Switch, Outlet, & Fixture, each additional $5 $3 $2 Pole or Platform Mounted Fixtures, first $183 $68 $115
Pole or Platform Mounted Fixtures, each additional $5 $3 $2 Swimming Pool/In-Ground Spa $467 $164 $303
Meter Reset $116 $82 $34
Misc. Permit, Flat Fee, or Hourly as determined by staff $98 $164 ($66) Inspections not specified $98 $164 ($66)
Re-inspections $98 $164 ($66)
After Hours Inspections (4 hours minimum) $118 $190 ($73) Mechanical Permit Fees
Permit Issuance $27 $78 ($51)
Forced-Air or Gravity-Type Furnace or Burner $149 $110 $39 Suspended/Recessed Wall/Floor Mounted Heater $133 $82 $51 Air-Handling/Condensing Unit
Single Family Residence $133 $82 $51
Non-Single Family Residence $183 $110 $73
Hood served by Mechanical Exhaust $219 $110 $109
Boilers, Compressors, and Absorption Systems $183 $110 $73 Misc. Permit, Flat Fee, or Hourly as determined by staff $98 $164 ($66) Inspections not specified $98 $164 ($66)
Re-inspections $98 $164 ($66)
After Hours Inspections (4 hours minimum) $118 $190 ($73) Plumbing Permit Fees
Permit Issuance $27 $78 ($51)
Plumbing Fixtures and Vents, fixtures 1-3 (total cost) $116 $68 $48 Plumbing Fixtures and Vents, each additional fixture $5 $3 $2

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Fee Name
Current
Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
Grease Interceptor $116 $27 $89
Gas System $116 $110 $6
Piping/Re-piping
Single Family Residential $163 $82 $81
Multi-Family Residential, first dwelling unit $70 $82 ($12) Multi-Family Residential, each additional unit $23 $14 $9 Water Heater $83 $82 $1
Tankless Water Heater $83 $208 ($125)
Solar Water Heating System $133 $164 ($31)
Sewer / Septic $150 $82 $68
Misc. Permit, Flat Fee, or Hourly as determined by staff $98 $164 ($66) Inspections not specified $98 $164 ($66)
Re-inspections $98 $164 ($66)
After Hours Inspections (4 hours minimum) $118 $190 ($73) Solar Permit Fees (State Fees)18
Residential – up to 15kw $252 $450 ($198)
Each additional kw New $15 N / A
Commercial – up to 50kw $252 $1,000 ($748)
Commercial – 51-250kw – per kw New $7 N / A
Commercial – 250kw+ - per kw New $5 N / A

The majority of Building Department fees show an under-recovery with the largest under- recovery relating to Commercial Solar Permits at $748. This is due to the City proposing to change the fees from the current structure to mimic the state set fees. Fees with an over-recovery range from a low of $1 for Water Heaters and a high of $303 for Swimming Pools/In-Ground Spas.

On average, the Building Department’s flat fees are recovering approximately 115% of fee related costs. It is important to note that even though these fees show an over-recovery and the Department / Division will have to lower these fees, there will be a minimal impact on the overall revenue. The proposed change of charging these fees only as standalone will minimize the amount of times the se fees are charged, as those services will be captured directly in the valuation-based fees.
3 Detailed Results – Valuation
Menifee currently uses a single multiplier to establish permit fees for all basic building permits based on the value of construction costs. As noted in the modifications section, the project team worked with City staff to create two separate valuation tables – Single Family and Non-Residential (Multi-Family / Commercial / Industrial) to better capture the different level of effort. Additionally, these costs capture the time associated with all inspections and reviews for structural, mechanical, electrical, and plumbing. The

18 Solar Permit full cost fees are state set by California Government Code 66015.

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following subsections discuss the valuation-based table and plan check percentage for Single-Family and Multi-Family / Commercial / Industrial projects. 1 Single Family – Permit and Plan Check Fee
The project team worked with staff to develop a separate valuation-based fee schedule that would reflect building staff time and effort for residential inspections. It was also discussed that while commercial projects can vary in dollar value dramatically, the cap of $1 million is appropriate for residential projects. The total cost calculated for each service includes direct staff costs and Departmental and Citywide overhead. Due to the current fee structure being variable based upon the number of fixtures, it was not possible to compare the City’s current fee to the full cost fee, therefore, t he following table only shows the total cost per unit for inspection (permit) services.

Table 15: Total Cost Per Unit Results – Single Family Residential Valuation

Project Valuation Sliding Scale Category Total Cost
Permit Fee
Project Valuation $1 to $500 $383.50
Project Valuation $501 to $2,000
First $500 $383.50
Each Additional $100 or fraction thereof $42.92
Project Valuation $2,001 to $25,000
First $2,000 $1,027.24
Each Additional $1,000 or fraction thereof $19.65
Project Valuation $25,001 to $50,000
First $25,000 $1,479.23
Each Additional $1,000 or fraction thereof $36.71
Project Valuation $50,001 to $100,000
First $50,000 $2,396.90
Each Additional $1,000 or fraction thereof $28.76
Project Valuation $100,001 to $500,000
First $100,000 $3,835.04
Each Additional $1,000 or fraction thereof $7.53
Project Valuation $500,001 to $1,000,000
First $500,000 $6,848.28
Each Additional $1,000 or fraction thereof $8.90
Project Valuation $1,000,001 +
First $1,000,000 $11,299.66
Each Additional $1,000 or fraction thereof $4.45

As noted above, the City’s previous methodology used a single factor to calculate building permit fees. The new valuation table above reflects a tiered system that captures economies of scale associated with single family residential projects. As the methodology was changed, there is no comparison of current fee to full cost fee.

Additionally, the total costs calculated include all potential trade permits that would be associated with those projects and would no longer require separate standalone fees.

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Along with determining costs associated with inspection services, the project team also worked with Building staff to determine appropriate plan check costs. Based upon a detailed review of time estimates provided to review plans for each valuation range and different project type this analysis showed that Single Family Residential Plan Check should be 65% of the permit fee.

Additionally, as the City is seeing an influx of repeat tract homes, homes that may have similar plans, but still require full inspection, the City is proposing a reduced fee. The fee for repeat tract homes would be 65% of the original building permit fee . This discount is primarily to reduce the plan check fees collected for those homes, as the plan review for these homes would be faster; even though inspection may take similar time. 2 Multi-Family / Commercial / Industrial
A separate valuation structure was developed for Multi-Family / Commercial / Industrial construction projects in order to better account for the services that are provided to applicants. It was decided that a cap of $10 million was sufficient for commercial projects. The total cost calculated for each service includes direct staff costs and Departmental and Citywide overhead. Due to the current fee structure being variable based upon the number of fixtures, it was not possible to compare the City’s current fee to the full cost fee, th erefore, the following table only shows the total cost per unit per unit for multi-family / commercial / industrial inspection (permit) services.

Table 16: Total Cost Per Unit Results – Multi-Family / Commercial / Industrial Valuation

Project Valuation Sliding Scale Category Total Cost
Permit Fee
Project Valuation $1 to $500 $383.50
Project Valuation $500 to $2,000
First $500 $383.50
Each Additional $100 or fraction thereof $52.05
Project Valuation $2,001 to $25,000
First $2,000 $1,164.21
Each Additional $1,000 or fraction thereof $38.71
Project Valuation $25,001 to $50,000
First $25,000 $2,054.48
Each Additional $1,000 or fraction thereof $32.87
Project Valuation $50,001 to $100,000
First $50,000 $2,876.28
Each Additional $1,000 or fraction thereof $41.09
Project Valuation $100,001 to $500,000
First $100,000 $4,930.76
Each Additional $1,000 or fraction thereof $8.22

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Project Valuation Sliding Scale Category Total Cost
Permit Fee
Project Valuation $500,001 to $1,000,000
First $500,000 $8,217.94
Each Additional $1,000 or fraction thereof $10.68
Project Valuation $1,000,001 to $5,000,000
First $1,000,000 $13,559.59
Each Additional $1,000 or fraction thereof $3.80
Project Valuation $5,000,001 to $10,000,000
First $5,000,000 $28,762.77
Each Additional $1,000 or fraction thereof $10.68
Project Valuation $10,000,001 +
First $10,000,000 $82,179.36
Each Additional $1,000 or fraction thereof $5.34

As noted above, the City’s previous methodology used a single factor to calculate building permit fees. The new valuation table above reflects a tiered system that captures economies of scale associated with multi-family and commercial projects. As the methodology was changed, there is no comparison of current fee to full cost fee.

Additionally, the total costs calculated include all potential trade permits that would be associated with those projects and would no longer require separate standalone fees.

Along with determining costs associated with multi-family / commercial / industrial inspection services, the project team also worked with Building staff to determine appropriate plan check costs. Based upon a detailed review of time estimates provided to review plans for each valuation range and different project type this analysis showed that Multi-Family / Commercial / Industrial Plan Check should be 85% of the permit fee. 4 Cross-Departmental Support
The Planning Division, Engineering Department, and Fire Department all provide plan check and/or inspection services on building related projects. In order to recover for all costs of providing these services, fees have been calculated for Planning Plan Review, Engineering Plan Review, and Fire Plan Check and Inspection services. The total cost calculated for each services includes direct staff costs and Departmental and Citywide overhead. The following sections detail the full cost associated with Planning , Engineering, and Fire support on building services.
1 Planning Cross-Departmental Support
The Planning Division provides plan check services on building related services such as new construction and tenant improvements/remodels. The total cost calculated for each service includes direct staff costs and Departmental and Citywide overhead. The following table details title/name and total full cost associated with Planning only.

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Table 17: Total Cost Per Unit Results – Planning Cross-Dept Support

Fee Name Planning Cost Per Unit
Planning Support – Building Plan Check
New Construction $900
Tenant Improvements / Remodels $375

Planning staff identified time related to building new construction and tenant improvements/remodels. These fees were developed as a flat fee as the division determined that there was not a significant change in time to review depending on the size of the project.
2 Engineering Cross-Departmental Support
The Engineering Department provides plan check services on building new construction related services. The total cost calculated for each service includes direct staff costs and Departmental and Citywide overhead. The following table details title/name and total full cost associated with Engineering only.

Table 18: Total Cost Per Unit Results – Engineering Cross-Dept Support

Fee Name Engineering Cost Per Unit
Engineering Support – Building Plan Check
New Single Family Residence $1,149
New Commercial Office $766
New Multi-Family Residence $1,149
All Other Projects $300

Engineering staff identified time related to building new construction projects based on the type of construction. These fees were developed as a flat fee as the division determined that there was not a significant change in time to review depending on the size of the project.
3 Fire Cross-Departmental Support
The Fire Department provides Fire Plan Check and Inspection services for building related services such as New Construction, Additions, and Remodels. These costs are assessed depending upon the square footage and occupancy and type of project. The following subsections details title/name and total full cost associated with Fire only.

3.1 Fire Cross-Departmental Support – Plan Check
The Fire Department provides plan check services on building related services such as New Construction, Additions, and Remodels. The total cost calculated for each service includes direct staff costs and Departmental and Citywide overhead. The following table

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details the title / name, current fee, total full cost associated with Fire only to provide these services, and the surplus or deficit associated with each service.

Table 19: Total Cost Per Unit Results – Fire Cross-Dept Support – Plan Check

Fee Name
Current
Fee
Fire Plan
Check Cost
Per Unit
Surplus /
(Deficit) per Unit
Development Plan Check and Inspections (Residential-New and Additions Group R) Per Square Feet 0-1,999 Square Feet $224 $233 ($9)
2,000-4,999 Square Feet $258 $292 ($34)
5,000-9,999 Square Feet $336 $350 ($14)
10,000-24,999 Square Feet $392 $408 ($16)
25,000-49,999 Square Feet $504 $525 ($21)
50,000-100,000 Square Feet $617 $642 ($25)
>100,000 Square Feet $765 $817 ($52)
Hazardous Use by Square Footage (New Construction or added space for Group H) 0-1,999 Square Feet $238 $233 $5
2,000-4,999 Square Feet $381 $408 ($27)
5,000-9,999 Square Feet $525 $583 ($58)
10,000-24,999 Square Feet $668 $700 ($32)
25,000-49,999 Square Feet $812 $875 ($63)
50,000-100,000 Square Feet $955 $992 ($37)
>100,000 Square Feet $1,147 $1,167 ($20)
Shell Buildings for All Commercial Uses (New Construction or added space for All Occupancies other than H and R)
0-1,999 Square Feet $224 $233 ($9)
2,000-4,999 Square Feet $258 $292 ($34)
5,000-9,999 Square Feet $336 $350 ($14)
10,000-24,999 Square Feet $392 $408 ($16)
25,000-49,999 Square Feet $504 $525 ($21)
50,000-100,000 Square Feet $617 $642 ($25)
>100,000 Square Feet $765 $817 ($52)
Buildings for Commercial Uses (New Construction or added Space for All Occupancies other than H and R)
0-1,999 Square Feet $224 $233 ($9)
2,000-4,999 Square Feet $258 $292 ($34)
5,000-9,999 Square Feet $336 $350 ($14)
10,000-24,999 Square Feet $392 $408 ($16)
25,000-49,999 Square Feet $504 $525 ($21)
50,000-100,000 Square Feet $617 $642 ($25)
>100,000 Square Feet $765 $817 ($52)
Tenant Improvement (New Construction, Additions and Major Remodels for All Occupancies other than H and R)
0-1,999 Square Feet $224 $233 ($9)
2,000-4,999 Square Feet $258 $292 ($34)
5,000-9,999 Square Feet $336 $350 ($14)
10,000-24,999 Square Feet $392 $408 ($16)
25,000-49,999 Square Feet $504 $525 ($21)
50,000-100,000 Square Feet $617 $642 ($25)
>100,000 Square Feet $765 $817 ($52)

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All but one fee for plan check on building services shows an under-recovery. The under- recoveries range from a low of $9 for the 0-1,999 sq. ft. for Residential, Shell, and Commercial New Construction and Tenant Improvements to a high of $63 for the 25,000- 49,999 range for Hazardous Use New Construction and additions. Fire is recovering approximately 95% of costs on plan check for new construction, additions, and remodels.

3.2 Fire Cross-Departmental Support – Inspection
The Fire Department provides inspection services on building related services such as New Construction, Additions, and Remodels. The total cost calculated for each service includes direct staff costs and Departmental and Citywide overhead. The following table details the title / name, current fee, total full cost associated with Fire only to provide these services, and the surplus or deficit associated with each service.

Table 20: Total Cost Per Unit Results – Fire Cross-Dept Support – Inspection

Fee Name
Current
Fee
Fire
Inspection
Cost Per Unit
Surplus /
(Deficit) per Unit
Development Plan Check and Inspections (Residential-
New and Additions Group R) Per Square Feet
0-1,999 Square Feet $224 $221 $3
2,000-4,999 Square Feet $258 $276 ($18)
5,000-9,999 Square Feet $336 $331 $5
10,000-24,999 Square Feet $392 $386 $6
25,000-49,999 Square Feet $504 $497 $7
50,000-100,000 Square Feet $617 $607 $10
>100,000 Square Feet $785 $773 $12
Hazardous Use by Square Footage (New Construction or
added space for Group H)
0-1,999 Square Feet $238 $221 $17
2,000-4,999 Square Feet $382 $386 ($4)
5,000-9,999 Square Feet $525 $552 ($27)
10,000-24,999 Square Feet $668 $662 $6
25,000-49,999 Square Feet $812 $828 ($16)
50,000-100,000 Square Feet $955 $938 $17
>100,000 Square Feet $1,177 $1,104 $73
Shell Buildings for All Commercial Uses (New
Construction or added space for All Occupancies other
than H and R)

0-1,999 Square Feet $224 $221 $3
2,000-4,999 Square Feet $258 $276 ($18)
5,000-9,999 Square Feet $336 $331 $5
10,000-24,999 Square Feet $392 $386 $6
25,000-49,999 Square Feet $504 $497 $7
50,000-100,000 Square Feet $617 $607 $10
>100,000 Square Feet $785 $773 $12
Buildings for Commercial Uses (New Construction or
added Space for All Occupancies other than H and R)
0-1,999 Square Feet $224 $221 $3

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Fee Name
Current
Fee
Fire
Inspection
Cost Per Unit
Surplus /
(Deficit) per Unit
2,000-4,999 Square Feet $258 $276 ($18)
5,000-9,999 Square Feet $336 $331 $5
10,000-24,999 Square Feet $392 $386 $6
25,000-49,999 Square Feet $504 $497 $7
50,000-100,000 Square Feet $617 $607 $10
>100,000 Square Feet $785 $773 $12
Tenant Improvement (New Construction, Additions and
Major Remodels for All Occupancies other than H and R)
0-1,999 Square Feet $224 $221 $3
2,000-4,999 Square Feet $258 $276 ($18)
5,000-9,999 Square Feet $336 $331 $5
10,000-24,999 Square Feet $392 $386 $6
25,000-49,999 Square Feet $504 $497 $7
50,000-100,000 Square Feet $617 $607 $10
>100,000 Square Feet $785 $773 $12

The majority of inspection fees for building services are over-recovering with a low of $3 for the 0-1,999 sq ft range for Residential, Shell, New Commercial, and tenant improvements to a high of $ 73 for Hazardous Use New Construction and additions for buildings larger than 100,000 sq ft. Fees shows a subsidy range from a low of $4 for 2,000-4,999 sq ft Hazardous Use to a high of $27 for 5,000-9,999 sq ft Hazardous Use.

Fire is recovering approximately 101% of costs on inspection for new construction, additions, and remodels.
4 Overall Cross-Departmental Support
Implementing the new fees for Planning and Engineering will help ensure that the City is appropriately recovering for all city departments’ costs as it relates to Building Plan Review and inspection. In regards to Fire, as the fees are related to the Building process it is recommended that these fees be relocated to Building’s fee schedule to more transparently identify to the applicant that along with a Building Plan Check and Permit fee, there are also fees for Planning, Engineering, and Fire Review and Inspection.

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12. Planning

The Planning Division is responsible for overseeing policy decisions made by the City and ensure compliance with the Development code as it relates to private development activity for residential and non-residential development. Fees examined in this study relate to Conditional Use Permits, Variances, Plot Plans, Tentative Parcel Maps, among other planning specific fees. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Planning Division.
1 Fee Schedule Modifications
During discussions with Planning staff, modifications were proposed to the current fee schedule, which include:
• Restructuring of fees: The restructuring of fees is outlined below:

- Minor Plot Plans were slightly renamed to Plot Plans Minor and broken out into additional categories for New Construction, Detached Accessory Structure, Model Home Complex, Shipping Containers, Tree Removal / Replacement, and Wall and Fence Plan Review.

- Planning Sign Review – Monument Non-Commercial and Planning Sign Review – Monument Commercial were combined into one Sign Permit (Monument) Comm/Ind/Res.

- Addition of City Clerk Appeal Fee amount into the Planning Appeal fee.

• Removal of fees: Environmental Monitoring Report, Parking Covenant Review, Setback Adjustment, and CC&R Review were eliminated from the Planning schedule, as these services are either covered under another fee or are provided by other departments.

• Addition of Fees: Fees were added to reflect current services being provided, but not captured as distinct fees on the fee schedule. These fees include: Tract Map Modifications, Minor Exceptions, Mobile Food Trucks, Multi-Family Ministerial Review – SB35, Noise Exceptions, Public Convenience & Necessity, Planned Development Zone Changes, Planning Review Fee, Minor Plot Plans for Shipping Containers and Tree Removals/Replacements, SB9 Urban Lot Splits, Reasonable

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Accommodation, Similar Use Determination, Site Plan Conceptual Review, Small Wireless Facility/Eligible Facilities Request, and Finance Tentative Parcel Maps.

The modifications outlined above will ensure that Planning’s fee schedule accurately reflects the services being provided by staff and help ensure that costs are captured appropriately.
2 Detailed Results
The Planning Division collects fees for items such as Conditional Use Permits, Variances, Plot Plans, Tentative Parcel Maps. The total cost calculated for each service includes direct staff costs, cross-departmental support (Fire, Engineering, Parks, and Building), Departmental, and Citywide overhead. The following table details the title / name, current fee, total full cost, and the surplus or deficit associated with each service.

Table 21: Total Cost Per Unit Results – Planning

Fee Name
Current
Fee
Total City
Cost Per
Unit19
Surplus /
(Deficit) per Unit
Accessory Dwelling Unit $2,235 $2,721 ($486)
Appeal20
Appeal – 1st $2,700 $4,437 ($1,737)
Appeal – 2nd $2,165 $3,877 ($1,712)
Conditional Use Permit
Major $13,49621 $17,822 ($4,326)
Major Revision $6,74822 $13,735 ($6,987)
Minor $2,665 $4,936 ($2,271)
Minor Revision $2,395 $4,151 ($1,756)
Environmental Assessment/Negative Declaration $4,210 $8,182 ($3,972) Environmental Determination (All Discretionary
Applications)23 $235 $367 ($132)
Film Permit (< 3 Days) $815 $1,525 ($710)
Final Site Development $5,845 $5,633 $212
Home Occupation $155 $410 ($255)
Land Division Phasing Map $5,395 $9,311 ($3,916)
Landscape Plan Review24
Commercial $2,545 $2,786 ($241)
Industrial $1,475 $2,786 ($1,311)
Front Yard Typical $1,540 $2,252 ($712)

19 This cost does not include any state or regional pass -through fees such as MSHCP as well as any additional deposits for Attorney review, CEQA fees or consultant costs.
20 Current Fee and Full cost for Appeal fees includes City Clerk fees and cost. 21 The current fee was set at 50% of the Major Plot Plan Fee per staff recommendation and doesn’t reflect the full cost calculated through the previous study.
22 The current fee was set at 50% of the CUP – Major fee and doesn’t reflect the full cost of the service calculated from the previous study.
23 This category includes Environmental Determination / Exemption and MSHCP ER P Flat fee review. As noted, additional deposits for consultants and attorney support may apply.
24 All landscape plans may be subject to additional fees associated with consultant review.

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Fee Name
Current
Fee
Total City
Cost Per
Unit19
Surplus /
(Deficit) per Unit
Open Space $4,040 $4,145 ($105)
Landscape Inspection $460 $664 ($204)
Tract Map (Per Subdivision Ord)
Major Modification New $28,203 N / A
Minor Modification New $14,420 N / A
Minor Exception New $520 N / A
Mobile Food Trucks New $697 N / A
Multi-Family Ministerial Review – SB35 New $11,574 N / A New Business Regulation Review (Home Based Business) $40 $248 ($208) Noise Exception – Single Event New $687 N / A
Public Convenience & Necessity W/O CUP New $2,635 N / A Planned Development Zone Change New $22,647 N / A
Planning Commission Hearing $2,440 $3,775 ($1,335)
Planning Review Fee New $186 N / A
Plot Plan – Major
Major $26,99225 $34,547 ($7,555)
Revision $13,49626 $27,928 ($14,432)
Plot Plan – Minor
Minor (New Development) $4,275 $5,494 ($1,219)
Revision $2,395 $3,884 ($1,489)
Detached Accessory Structure $2,335 $2,640 ($305)
Model Home Complex (Includes Sign Pkg) $2,345 $3,695 ($1,350) Shipping Containers New $782 N / A
Tree Removal / Replacement Permit New $1,131 N / A
Wall & Fence Plan Review $2,700 $3,100 ($400)
Pre-Application Review $1,44227 $8,539 ($7,097)
Pre-Existing Non-Conforming Use Verification $1,160 $2,388 ($1,228) Reasonable Accommodation New $1,545 N / A
SB9 Urban Lot Split Fee New $5,036 N / A
Sidewalk Vending Permit Application $695 $697 ($2)
Sign Admin Relief Review $550 $630 ($80)
Sign Permit
Affixed To Building $225 $348 ($123)
Monument – Comm / Ind / Res $650 $1,543 ($893)
Temporary (Commercial) $155 $248 ($93)
Sign Program $2,610 $3,864 ($1,254)
Sign Program Amendment $735 $925 ($190)
Similar Use Determination New $1,706 N / A
Site Plan Conceptual Review New $3,972 N / A
Small Wireless Facility/Eligible Facilities Request28 New $4,031 N / A Substantial Conformance $2,575 $4,639 ($2,064)
Tentative Parcel Map
Commercial / Industrial $12,94029 $17,316 ($4,376)
Finance New $7,782 N / A
Residential $11,040 $17,316 ($6,276)

25 The current fee was recommended based upon a regional average and doesn’t reflect the full cost calculated in the previous study. 26 The current fee was set at 50% of the Plot Plan Major and doesn’t reflect the full cost of service calculated from the previo us study. 27 The current fee amount was recommended to be subsidized and doesn’t reflect the full cost calculated from the previous study. 28 Additional deposit may be required for 3 rd party review per City Code allowances. 29 The current fee was recommended at a lowe r level than what was calculated in the previous study.

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Fee Name
Current
Fee
Total City
Cost Per
Unit19
Surplus /
(Deficit) per Unit
Revised $7,74030 $14,721 ($6,981)
Tentative Tract Map – Minor Condition Change $3,340 $9,224 ($5,884) Time Extension
City Approved Project $3,510 $4,050 ($540)
Plot Plan (5-10 Yrs) $12,250 $6,917 $5,333
Temporary Use Permit
Major $1,735 $2,030 ($295)
Major (501C) $86831 $2,030 ($1,163)
Minor $695 $1,351 ($656)
Minor (501C) $34832 $1,351 ($1,003)
Variance
Filed Alone $5,205 $5,611 ($406)
Filed With Other Applications $2,605 $2,607 ($2)
Zoning Information Letter $375 $472 ($97)
Additional Plan Check33 25% of Initial Application Fee

The fees in the table reflect the full cost of providing each service which includes Planning time as well as time for Engineering, Fire, Building, Community Services, and City Clerk staff. Most fees show a deficit. However, some of the fees with large deficits such as Major Plot Plan or Revised Tentative Parcel map were adopted at a subsidized rate compared to the previous analysis. Therefore, the current analysis shows a much higher deficit as it is taking into account the existing deficit from the previous analysis as well as any cost factor changes. The over-recoveries ranges from a low of $212 for Final Site Developments to a high of $5,333 for Plot Plan Time Extensions. The Plot Plan Time Extension surplus is due to process changes which has reduced the level of time associated with these permits and increased overall efficiency. On average, the planning division is recovering approximately 66% of flat fee related costs. 3 Deposit Based Fees
The Planning Division charges many of its fees as deposits as they can span several months and can be very complex in nature. Since these types of applications can vary to widely in the time that staff are required to spend on them, a deposit is generally recommended to ensure that the full cost of the service is recovered. The following table shows the current deposit-based fees for planning and the proposed deposit amount:

30 The current fee was recommended at a lower level than what was calculated in the previous study. 31 The current fee was recommended to be set at 50% of the Major non -501(C) rate per staff and was not set at the full cost from the previous analysis.
32 The current fee was recommended to be set at 50% of the Minor non-501(C) rate per staff and was not set at the full cost from the previous analysis.
33 All flat fees cover up to three (3) plan checks / reviews. This fee is assessed for anything above and beyond that.

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Table 22: Deposit-Based Fees – Planning

Fee Name
Current
Deposit
Recommended
Deposit
Surface Mining & Reclamation Act $20,000 $20,000
Annexation Request $20,000 $20,000
Zone Change $5,000 $5,000
Development Agreement $10,000 $10,000
EIR Review $20,000 $20,000
Expedited Environmental Habitat Review (ERP) $1,380 $1,500 General Plan Amendment $10,000 $10,000
Planned Unit Development $10,000 $10,000
Specific Plan $20,000 $20,000
Specific Plan Amendment $10,000 $10,000
Sphere Of Influence Amendment $10,000 $10,000
Study Review/Scoping Agreement $1,000 $1,000
Traffic Analysis Review New $5,000
Land Division Unit Map $5,395 $5,000
Ag Preserve Cancellation $5,000 $5,000
Historic Property Preservation $5,000 $5,000
Hazardous Waste Facility Siting Permit $20,000 $20,000 Hog Ranch Processing $10,000 $10,000
Noise Exception - On-Going Event $5,000 $5,000
MSHCP HANS $2,000 $2,000

As the table indicates the majority of the City’s initial deposits are set to adequately recover for it’s minimum review time. Any additional time will still need to be billed hence the need for the deposit. The Land Division Unit Map was previously a flat fee, but has been recommended to be collected as a deposit as the level of service can vary significantly.
4 Deposit Based Fees – Cost Recovery Policy
As noted in the previous section, the Planning Division collects initial deposits for many of its larger projects and staff bill time and materials associated with the plan review and inspection of these projects to each specific project. In order for the City to achieve full cost recovery on deposit-based fees, it is critical that the following components are addressed and put into place:
• Positions(s): Identify the position(s) within Finance or Community Development that will be responsible for conducting the billing and / or invoicing for the deposit- based fees.
• Timekeeping: Identify the procedure for timekeeping as it is done by Planning and all other cross-departmental staff, including if timekeeping will be done outside of

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the current timekeeping system, or if it will be part of the timekeeping system with project numbers assigned to each deposit-based fee project. • Hourly Rates: It is recommended that the fully burdened hourly rate (salaries + benefits + productive hours + departmental overhead + citywide overhead) be used for billing purposes. The hourly rate should also be specific to the position. The City should identify the hourly rate(s) that will be used – a singular blended rate, or a separate rate for the position reviewing the application and the type of hourly rate used.
• Billing / Refunding: The City should clearly outline when the department and / or division should request for additional funding. The standard recommendation is if 10% of the initial deposit is left, the applicant should be billed for additional funds.

Policies regarding refund amounts and to whom the refund will be issued should be identified. Refunds should not be issued until all invoices have been paid across all departments involved in the process.
• Stop Work Order / Permit Issuance: The City should also include language regarding if no payment has been received on an invoice for 90 days, the application will be considered dormant and City staff will stop all work on the project. Additionally, it should also clearly clarify when the approval will be granted.

The standard recommendation is that until final payment has been received no final approval can be granted or issued.

Ultimately, deposit-based fees are known as cost recovery fees, as City staff recover all of their time and material costs associated with reviewing those applications. However, in order for these fees to be cost recovery, it is critical that the City have the previously discussed policies and procedures in place.

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13. Engineering

The Engineering Division is responsible for ensuring new development and infrastructure meet City policies and codes in order to protect the natural environment while allowing new development to provide residents, visitor, and business with quality infrastructure.

Engineering provides review, permitting, and plan check on all land development, private development, and public improvements. Fees examined in this study relate to Grading, Encroachments, Public Improvements, and Water Quality. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Engineering Division.
1 Fee Schedule Modifications
During discussions with Engineering staff, modifications were proposed to the current fee schedule, which include:
• Removal of fees: The Drilling Permit, Development of Oil Gas and Minerals, approval of Exploratory Boundary, Mining and Extraction Water Development, and Miscellaneous Right of Way Document are being removed, as Engineering staff no longer oversee these processes.

• Expansion of fees: Fees are proposed to be broken out to better specify services offered. The following points provide the fees and the categories into which they were created:

- Single Family Residence Grading / Drainage Plan Check: previous ranges were 1-4 lots, 5-20 lots, 21-50 lots, 51-100 lots, and 1 00+ lots. These were expanded and combined into 1-50 lots, 51-75 lots, 75 -200 lots, and 200+ lots.

- Public Improvements: the current public improvement valuation table ends at $500,000. It was determined that this range was too low for the majority of project costs and as such the table has been revaluated and expanded to the highest range of $25,000,000.

- Comm/Reg Park: this was split from a singular fee into two different categories: Community Park and Regional Park.

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- Residential Grading/Drainage Inspections: this was split from a singular fee into two different categories: Residential Up to 1 acre (charged as a flat fee) and Residential 1+ acres (charged as a deposit).

- Commercial / Industrial Final Parcel Map: this was split from a singular fee into a Base per map fee and an additional fee per acre.

- Preliminary Water Quality Management Plan Review: this was split from a singular fee into three different categories: small, medium, and large.

- Final Water Quality Management Plan Review w/o Approved Prelim: this was split from a singular fee into three different categories: small, medium, and large.

• Change to fee type: Landscaping Improvements which were previously charged at

0.5 times the Public Improvements valuation table costs, will now be charged as a flat fee.

• Addition of fees: Fees were added to reflect current services being provided but not identified as separate fees on the schedule. These services include:

Standalone Single-Family Grading, Minor Modification of Traffic Signals, Parking Covenant Review, ESA Review, Encroachment Plan Review and Permit categories.

The modifications outlined above will ensure that the Engineering fee schedule accurately reflects the services being provided by staff and help ensure that costs are captured appropriately.
2 Detailed Results
The Engineering Division collects fees for items such as rough grading/drainage, precise grading/drainage, encroachment permits, public improvements, Final Maps, and Water Quality. The total cost calculated for each service includes direct staff costs, cross- departmental support (Planning, Fire, Parks), Consultant Costs, Departmental, and Citywide overhead. The following table details the title / name, current fee, total full cost to provide these services, and the surplus or deficit associated with each service.

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Table 23: Total Cost Per Unit Results – Engineering

Fee Name Current Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
Rough Grading / Drainage Plan Check (Single Family Residence) 1-50 Lots $1,865 $5,489 ($3,624)
51-75 Lots $10,960 $10,904 $56
75- 200 Lots Deposit $16,172 N / A
Precise Grading / Drainage Plan Check (Single Family Residence) 1-50 Lots $1,865 $5,246 ($3,381)
51-75 Lots $3,695 $8,715 ($5,020)
75- 200 Lots $10,960 $13,080 ($2,120)
Standalone Single Family Grading New $5,480 N / A
Rough Grading/Drainage Plan Check (Multiple Family Residence, Commercial, Industrial) 0-50K Sqft $5,925 $6,777 ($852)
>50K-100K Sqft $7,420 $8,657 ($1,237)
>100K-500K Sqft $9,075 $11,782 ($2,707)
>500K-1mil Sqft $10,335 $13,906 ($3,571)
Precise Grading/Drainage Plan Check (Multiple Family Residence, Commercial, Industrial) 0-50K Sqft $5,925 $6,627 ($702)
>50K-100K Sqft $8,680 $9,700 ($1,020)
>100K-500K Sqft $11,595 $14,367 ($2,772)
>500K-1mil Sqft $13,500 $15,835 ($2,335)
Extra Plan Check 1/4 Initial Fee
Encroachment and Public Improvements:

Encroachment Permit Issuance $65 $121 ($56)
Encroachment Review New $591 N / A
Per plan sheet New $295 N / A
Encroachment Permits:

Permits per Event under existing annual permit New $60 N / A Permits for One Day Work New $433 N / A
Permits Exceeding One Day Work New $433 N / A
Permits for Major Projects New $296 N / A
Permits for One Day Work, Multiple Locations New $513 N / A Permits for Night-Time Work New $550 N / A
Additional Review (Traffic Control) New $158 N / A
Additional Inspection New $137 N / A
Public Improvement Plan Review: (Assumes up to 3 plan reviews, anything beyond 3 would be charged time and material).
$0-$500,000 Deposit $8,564 N / A
$500,000 Deposit $8,564 N / A
Per $1,000 Deposit $8.80 N / A
$1,000,000 Deposit $12,962 N / A
Per $1,000 Deposit $2.95 N / A
$5,000,000 Deposit $24,743 N / A
Per $1,000 Deposit $1.25 N / A
$10,000,000 Deposit $30,991 N / A
Per $1,000 Deposit $1.30 N / A
$25,000,000 Deposit $50,540 N / A
Per $1,000 Deposit $0.65 N / A
Public Improvement Inspection 3.00% 3.00% 0.00%

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Fee Name Current Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
Landscaping Improvements34 Varies $4,480 N / A
Neighborhood Park $6,690 $11,863 ($5,173)
Community Park $9,940 $15,459 ($5,519)
Regional Park $9,940 $18,197 ($8,257)
Signing & Striping (if not included in the street
improvement plans) $1,370 $3,546 ($2,176)
Per Sheet $800 $443 $357
Traffic Signal $5,370 $6,907 ($1,537)
Minor Modification of Traffic Signals New $2,724 N / A Extra Plan Check 1/4 of Initial Fee
Grading/Drainage Inspection
Residential Up to 1 acre Deposit $1,885 N / A
Traffic Engineering Exhibits
Traffic Control Plan $30 $64 ($34)
Per Sheet $200 $474 ($274)
Trip Generation Letter $740 $839 ($99)
Per study $1,000 $1,264 ($264)
Small Study (<500 ADT) $740 $839 ($99)
Per study $2,000 $1,896 $104
Typical TIA (500-1,000 ADT) $740 $839 ($99)
Per study $3,000 $3,160 ($160)
Large TIA (1,000+ ADT) $740 $839 ($99)
Per study $5,000 $5,056 ($56)
Parking Study $740 $839 ($99)
Per study $2,000 $3,160 ($1,160)
Final Parcel Maps
Residential Parcel Map $8,890 $10,047 ($1,157)
Commercial/Industrial Parcel Map
<20 acres $11,195 $13,238 ($2,043)
Per additional acre New $118 N / A
Final Tract Map
5-20 Lots $12,640 $9,469 $3,171
21-50 Lots $14,495 $13,726 $769
51-100 Lots $17,295 $18,087 ($792)
Amendment to final map $4,645 $5,755 ($1,110)
Survey/Mapping Review
Lot Line Adjustment / Merger $3,940 $4,228 ($288)
Survey Monument Field Inspection $335 $650 ($315)
Record of Survey Plan Check $3,135 $3,170 ($35)
Certificate of Compliance $3,650 $3,542 $108
Substantial Compliance $1,550 $2,325 ($775)
Reversion to Acreage $3,830 $3,612 $218
Certificate of Correction Issuance $2,935 $2,817 $118 Vacation $4,620 $4,561 $59
Quitclaim $3,120 $3,077 $43
Easement Processing $3,085 $3,051 $34
Parking Covenant Review New $2,587 N / A

34 Landscaping Improvements current fee varies and is based on 50% of the Public Improvement Permit.

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Fee Name Current Fee
Total City
Cost Per Unit
Surplus /
(Deficit) per Unit
Water Quality/Stormwater
Preliminary Water Quality Management Plan Review
(WQMP)
Small New $4,265 N / A
Medium New $5,895 N / A
Large New $6,670 N / A
Final WQMP w/ Approved Prelim $5,570 $6,014 ($444)
Final WQMP w/o Approved Prelim
Small New $3,558 N / A
Medium New $4,356 N / A
Large New $5,923 N / A
Stormwater Inspection: Commercial / Industrial
Businesses
Low Priority $195 $539 ($344)
Medium/High Priority $455 $662 ($207)
Reports/Studies
Geotechnical Study $1,705 $1,915 ($210)
Traffic Scoping Study $1,145 $1,124 $21
ESA Review New $1,915 N / A
Special Districts
CFD/LMD Annexation $2,580 $2,623 ($43)
Bonds
Bond Release $710 $1,741 ($1,031)
Bond Reduction $710 $2,036 ($1,326)
Bond Replacement $710 $1,741 ($1,031)
Initial Bond Posting New $1,761 N / A
Misc Services
City Property Acquisition Process $1,520 $2,958 ($1,438) Street Name Change $650 $787 ($137)
Block Party Processing $505 $427 $78
Wide and Overload Permit35
Daily $16 $360 ($344)
Annual $90 $360 ($270)
Haul Route Review $165 $1,225 ($1,060)
Borrow Site Plan Check $1,095 $1,516 ($421)
Stockpile Plan Check $850 $1,594 ($744)
Stockpile/Borrow Site Inspection $500 $587 ($87)

As noted, the total cost per unit includes all City costs including Engineering staff time as well as Planning, Fire, and Community Services staff time and consultant costs. Once all city costs are factored in the majority of fees show an under-recovery for Engineering.

The over-recovery ranges from a low of $21 for Traffic Scoping Study to a high of $3,171 for a Final Tract Map with 5-20 lots. The under-recoveries range from a low of $34 for Traffic Control Plans to a high of $8,257 for Regional Park Public Improvements. Overall Engineering fees show an average cost recovery of 78%.

35 Daily and Annual Wide and Overload Permits are showing the full cost for providing the service. However, the fees for this se rvices are set by CalTrans at $16 for a Daily permit and $90 for an Annual permit.

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3 Deposit Based Fees
The Engineering Department charges many of its fees as deposits as they can span several months and can be very complex in nature. Since these types of applications can vary so widely in the time that staff are required to spend on them, a deposit is generally recommended to ensure that the full cost of the service is recovered. The following table shows the proposed deposit amount for Engineering:

Table 24: Deposit-Based Fees – Engineering

Fee Name Recommended Deposit
Rough Grading / Drainage Plan Check (Single Family Residence) 200+ Lots $20,000
Precise Grading / Drainage Plan Check (Single Family Residence) 200+ Lots $15,000
Rough Grading/Drainage Plan Check (Multiple Family Residence, Commercial, Industrial)
>1mil+ Sqft $15,000
Precise Grading/Drainage Plan Check (Multiple Family Residence, Commercial, Industrial)
>1mil+ Sqft $20,000
Plan Check Revision $10,000
Encroachment and Public Improvements:

Encroachment and Public Improvements Plan Check Revision $10,000 Permits for Major Projects (Inspections) $1,500
Grading/Drainage Inspection
Residential 5+ acres $3,000
Final Tract Map
100+ Lots $20,000
Survey/Mapping Review
Survey Monument Field Inspection Deposit $10,000
Condominium Conversion Review $10,000
Vacation Deposit $10,000
CC&R $3,000
Reports/Studies
Drainage Study $2,500
Special Districts
CFD/LMD Annexation Deposit $5,000
CFD/Assessment District Audit $10,000
Assessment District Formation $20,000
Bonds
Bond Release Deposit $2,000
Bond Reduction Deposit $3,000
Bond Replacement Deposit $2,000
Misc Services
TUMF Audit $10,000
Misc. Engineering Agreements $10,000
City Property Acquisition Process Deposit $5,000
Misc Planning/Engineering Review $5,000

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The City currently does not list specific deposit amounts and the schedule states “Deposit determined by staff with charges at the fully allocated hourly rates of involved personnel, plus any outside costs”. It has been recommended to replace this statement with proposed deposit amounts, to allow for greater transparency. These deposits are meant to be an initial minimum deposit amount, providing the city with flexibility to collect additional monies as needed.

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14. Comparative Survey

As part of the Cost of Services (User Fee) study for the City of Menifee, the Matrix Consulting Group conducted a comparative survey of user fees. The City identified eight jurisdictions to be included in the comparative survey: Corona, Hemet, Lake Elsinor e, Moreno Valley, Murrieta, Perris, Riverside, and Temecula. The project team then reviewed public documents (i.e., agenda items, staff reports, budgets, fee schedules, and ordinances), and / or contacted jurisdictions to get comparative information.

While this report will provide the City with a reasonable estimate and understanding of the true costs of providing services, many jurisdictions also wish to consider the local “market rates” for services as a means for assessing what types of changes in fee levels their community can bear. However, a comparative survey does not provide adequate information regarding the relationship of a jurisdiction’s cost to its fees.

The following sections detail various factors to consider when reviewing comparative survey results, as well as graphical comparisons of current fees and total calculated costs for various permits issued or services provided by the City. 1 Economic Factors
In order to provide additional context to the comparative survey information, the project team collected economic factors for the jurisdictions included. Three important economic factors to consider when comparing fees across multiple jurisdictions are:
population, budget, and workforce size. The following tables rank each jurisdiction from smallest to largest for each of these economic factors:

Table 25: Ranking of Jurisdictions by Population
Jurisdiction 2020 Population
Lake Elsinore 70,265
Perris 78,700
Hemet 89,833
Menifee 102,527
Temecula 110,003
Murrieta 110,949
Corona 157,136
Moreno Valley 208,634
Riverside 314,998

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Table 26: Ranking of Jurisdictions by Citywide Total Budget36

Jurisdiction FY20/21 Budget
Lake Elsinore $47,064,800
Temecula $77,575,676
Menifee $90,712,363
Hemet $91,318,470
Murrieta $114,779,457
Perris $142,641,936
Moreno Valley $245,021,960
Corona $345,336,056

Table 27: Ranking of Jurisdictions by Workforce Size

Jurisdiction FY20/21 FTE
Temecula 172.95
Lake Elsinore 176
Perris 177.1
Menifee 199
Hemet 287.1
Murrieta 343
Moreno Valley 352
Corona 744.01

Based on the data shown in the previous tables, the City of Menifee ranks in the lower middle of surveyed jurisdictions in terms of population, budget, and size of workforce. 2 Recency Factor
While the previous comparative information can provide some perspective when comparing Menifee’s fees with surveyed jurisdictions, other key factors to consider are when a jurisdiction’s fee schedule was last updated and when the last comprehensive analysis was completed. The following tables detail when each surveyed jurisdiction last conducted a fee analysis and when they last updated their fee schedule.

Table 28: Last Fee Study Conducted
Jurisdiction Response
Perris 1998
Hemet 2014
Moreno Valley 2016
Murrieta 2017
Corona 2018
Lake Elsinore 2018
Temecula 2021
Riverside In Progress37

36 To ensure appropriate comparisons, full opera ting budget (all funds) has been used for all jurisdictions. 37 Riverside is currently undergoing a comprehensive Citywide User Fee Study.

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Table 29: Last Fee Schedule Update
Jurisdiction Response
Perris Over 10 years ago38
Hemet 2016
Corona 2019
Murrieta 2019
Lake Elsinore 2021
Riverside 2021
Moreno Valley 2022
Temecula 2022

Five of the eight surveyed jurisdictions have conducted fee studied within the last five years. Temecula recently conducted a fee study in 2021, and Riverside is currently undergoing a fee study. Perris is the only jurisdiction which has not completed a fee study in over 10 years. With the exception of Hemet and Perris all other jurisdictions have updated their fee schedule within the last three years. Hemet updated their fee schedule within the last five years and Perris has not updated their fee schedule in over 10 years.

It is important to note that even though jurisdictions may have conducted fee studies, fees are not always adopted at full cost recovery. The comparative results will only show the adopted fees for the surveyed jurisdictions, not necessarily the full cost associated with the comparable service.
3 Additional Factors
Along with keeping the statistics outlined in the previous sections in mind, the following issues should also be noted regarding the use of market surveys in the setting of fees for service:
• Each jurisdiction and its fees are different, and many are not based on the actual cost of providing services.

• The same “fee” with the same name may include more or less steps or sub- activities. I n addition, jurisdictions provide varying levels of service and have varying levels of costs associated with providing services such as staffing levels, salary levels, indirect overhead costs, etc.

Market surveys can run the risk of creating a confusing excess of data that will obscure rather than clarify policy issues. Because each jurisdiction is different, the Matrix Consulting Group recommends that the information contained in the market comparison

38 Perris’ last fee study upon which the current fees are based was complete around 1998.

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of fees be used as a secondary decision-making tool, rather than a tool for establishing an acceptable price point for services.
4 Comparative Survey Results
As part of this study, the project team conducted a survey of how the City’s current user fees and calculated full cost compare to other similarly sized and regionally located jurisdictions. The following subsections provide a comparative look at several fee-related services provided by the City versus the surveyed jurisdictions. 1 New Business Registration
Currently, the Finance Department charges a fee of $65 to register new businesses.

Through this study, the project team calculated the full cost of this service to be $76. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($65) is only slightly above the jurisdictional average of $61, while the full cost calculated ($76) is higher than the average. Corona, Perris, Hemet, and Riverside do not include a fee for new business registration on their current fee schedules. Temecula is the only city with a significantly lower fee ($35).

2 Duplicate Business License
Currently, the Finance Department charges a fee of $5 to duplicate a business license.

Through this study, the project team calculated the full cost of this service to be $6. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.
$-
$20
$40
$60
$80
Menifee - Current Menifee - Full Cost Lake Elsinore Moreno Valley Murrieta Temecul a New Business Registration
Fee Average

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Menifee’s current fee ($5) and full cost calculated ($6) are both well below the jurisdictional average of $9 The cities of Corona, Hemet, Perris, and Temecula all do specifically call out a fee for duplicating business licenses on their current fee schedules.

Moreno Valley charges the same as Menifee’s current fee, while all other jurisdictions charge $10 and above.

3 Small Facility Rental
Currently, the Community Services Department charges $40 for a two-hour small facility rental on a weekday for less than 20 people. Through this study, the project team calculated the full cost of this service to be $49. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($40) and the full cost calculated ($49) are both lower than the jurisdictional average of $118. Murrieta’s fee of $300 is a deposit. Hemet does not have a department for Parks and Recreation or Community Services, as such they do not charge a fee. Additionally, Perris does not include a small facility rental fee on their fee schedule. All the other cities charge less than the jurisdictional average but more than Menifee’s current and full cost fee. These fees range from a low of $70 for Lake Elsinore to a high of $90 for both Corona and Riverside.

$-
$5
$10
$15
Menifee - Current Menifee - Full Cost Lake Elsinore Moreno Valley Murrieta Riverside Duplicate Business License
Fee Average
$-
$50
$100
$150
$200
$250
$300
$350
Menifee -
Current
Menifee - Full
Cost
Corona Lake Elsinore Moreno Valley Murrieta Riverside Temecul a Small Facility Rental

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4 Large Picnic Shelter Rental – With Jumper
Currently, the Community Services Department charges $125 for a five-hour large picnic shelter rental. Through this study, the project team calculated the full cost of this service to be $211. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($125) is less than the jurisdictional average of $180, while the full cost calculated ($211) is higher than the average. Both Corona ($310) and Lake Elsinore ($226) charge more than the jurisdictional average and Menifee’s full cost. The rest of the cities charge less than the average, ranging from a low of $120 for Riverside and Temecula to a high of $176 for Moreno Valley.

5 One Time Ballfield Rental
Currently, the Community Services Department charges $140 for four-hour one-time adult ballfield rental with three hours of field lights. Through this study, the project team calculated the full cost of this service to be $145. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

$-
$50
$100
$150
$200
$250
$300
$350
Menifee -
Current
Menifee -
Full Cost
Corona Lake
Elsinore
Moreno
Valley
Murrieta Riverside Temecula
Large Picnic Shelter Rental
$-
$50
$100
$150
$200
Menifee - Current Menifee - Full Cost Corona Moreno Valley Murrieta One Time Ballfield Rental - With Field Lights

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Menifee’s current fee ($140) is less than the jurisdictional average of $143.53, while the full cost calculated ($145) is higher than the average. Corona ($160) charges more than the jurisdictional average, while Moreno Valley ($128) and Murrieta ($143) both charge less than the average. Lake Elsinore, Perris, Riverside, and Temecula do not include a one-time ballfield rental fee on their fee schedule, as their field rentals are limited to sports leagues.

6 Vacant Lot Weed Abatement
Currently, the Code Enforcement Department charges a fee of $126 to remove weeds from vacant lots. Through this study, the project team calculated the full cost of this service to be $438. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($126) is below the jurisdictional average of $199, while the full cost calculated ($438) is significantly higher than the average. All of the comparable cities which have a fee for vacant lot weed abatement on their fee schedule charge more than Menifee’s current fee, with Murrieta charging the highest ($235).

7 Police Report
Currently, the Police Department charges a fee of $18 for a non-traffic incident police report of 10 pages. Through this study, the project team calculated the full cost of this service to be $39. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.
$-
$100
$200
$300
$400
$500
Menifee - Current Menifee - Full Cost Moreno Valley Murrieta Riverside Vacant Lot Weed Abatement
Fee Average

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Menifee’s current fee ($18) is above the jurisdictional average of $10, while the full cost calculated ($39) is significantly higher than the average. Murrieta charges the same as Menifee’s current fee and Temecula charges more ($24). All other cities charge less than Menifee’s current rate.

8 Police Clearance
Currently, the Police Department charges a fee of $20 to provide police clearance.

Through this study, the project team calculated the full cost of this service to be $28. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Both Menifee’s current fee ($20) and full cost calculated ($28) are well above the jurisdictional average of $17, but are below the fee charged by Corona ($35). All other cities charge less than the average.

9 Citation Sign-Off
Currently, the Police Department charges a fee of $15 to sign-off on a non -residential citation. Through this study, the project team calculated the full cost of this service to be $-
$5
$10
$15
$20
$25
$30
$35
$40
$45
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Moreno Valley Murrieta Riverside Temecul a Police Report
$-
$5
$10
$15
$20
$25
$30
$35
$40
Menifee - Current Menifee - Full Cost Corona Hemet Moreno Valley Murrieta Police Clearance

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$38. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($15) is below the jurisdictional average of $19, while the full cost calculated ($38) is significantly higher than the average. Corona charges $50 for this service, which is significantly higher than both Menifee’s current fee and full cost and more than the jurisdictional average. Temecula charges more than Menifee’s current rate ($17), Riverside and Moreno Valley charge the same rate as Menifee, and Hemet charges significantly less ($6).

10 Stored Vehicle Release
Currently, the Police Department charges a fee of $150 to release a stored vehicle.

Through this study, the project team calculated the full cost of this service to be $201.

The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

$-
$10
$20
$30
$40
$50
$60
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Moreno Valley Murrieta Riverside Temecul a Citation Sign-Off
$-
$50
$100
$150
$200
$250
$300
$350
$400
$450
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Moreno
Valley
Murrieta Pe rris Riverside Temecul a
Stored Vehicle Release (Impound)

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While Menifee’s total current fee ($345) and total full cost calculated ($346) are close to one another, they are both significantly lower than the jurisdictional average of $55 1. All of the comparable jurisdiction charge more than Menifee, ranging from Murrieta with $379 to Temecula which charges $755. Notable, Perris contracts Riverside County Fire Department and charges a deposit-based fee starting at $614.

11 New 13D Residential Fire Sprinkler
Currently, the Fire Department charges a total fee of $345 for plan check and inspection of a 2,000 sq. ft. new 13D residential fire sprinkler system. Through this study, the project team calculated the full cost of this service to be $359. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

While Menifee’s total current fee ($345) and total full cost calculated ($359) are close to one another, they are both lower than the jurisdictional average of $551. Corona ($605), Hemet ($622), Lake Elsinore ($616), and Temecula ($755) all charge more than the jurisdictional average. With the exception of Perris, all other cities charge less than the average. Perris charges a deposit-based fee starting at $614.

12 New Fire Alarm System
Currently, the Fire Department charges a total fee of $682 for plan check and inspection of a new fire alarm system. Through this study, the project team calculated the full cost of this service to be $709. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.
$-
$100
$200
$300
$400
$500
$600
$700
$800
Menifee -
Current
Menifee -
Full Cost
Corona Hemet Lake
Elsinore
Moreno
Valley
Murrieta Pe rris Riverside Temecul a
New 13D Residential Fire Sprinkler System
Plan Check Inspection Average

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While Menifee’s total current fee ($682) and total full cost calculated ($709) are close to one another, they are both higher than the jurisdictional average of $621. Corona ($670), Lake Elsinore ($755), and Temecula ($1,049) all charge more than the jurisdictional average. With the exception of Perris, all other cities charge less than the average. Perris charges a deposit-based fee starting at $627. Additionally, Lake Elsinore and Riverside charge a flat fee and do not differentiate between plan check and inspection.

13 Hood & Duct Automatic Extinguishing System
Currently, the Fire Department charges a total fee of $560 for plan check and inspection of an automatic hood and duct extinguishing system. Through this study, the project team calculated the full cost of this service to be $5 65. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

$-
$200
$400
$600
$800
$1,000
$1,200
Menifee -
Current
Menifee -
Full Cost
Corona Hemet Lake
Elsinore
Moreno
Valley
Murrieta Pe rris Riverside Temecul a
New Fire Alarm System
Plan Check Inspection Average
$-
$100
$200
$300
$400
$500
$600
$700
$800
$900
Menifee -
Current
Menifee -
Full Cost
Corona Hemet Lake
Elsinore
Moreno
Valley
Murrieta Pe rris Riverside Temecul a
Hood & Duct Automatic Extinguishing System
Plan Check Inspection Average

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Menifee’s total current fee ($560) is $16 more than the total full cost calculated ($5 65), and both are higher than the jurisdictional average of $523. Corona ($670), Hemet ($566), Riverside ($625), and Temecula ($842) all charge more than the jurisdictional average.

With the exception of Perris, all other cities charge less than the average. Perris charges a deposit-based fee starting at $215. Additionally, Lake Elsinore charges a flat fee and does not differentiate between plan check and inspection.

14 Residential Re-roof
Currently, the Building Department charges a $125 fee for residential re-roof. Through this study, the project team calculated the full cost of this service to be $188. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s total current fee ($125) and full cost calculated ($188) are significantly lower than the jurisdictional average of $295. With the exception of Perris, which doesn’t have specific re-roofing fee, all other cities charge a higher fee than Menifee. The fees range from a low of $196 for Lake Elsinore to a high of $417 for Riverside.

15 Bathroom Remodel
Currently, the Building Department charges a valuation-based fee of $ 403 for a 500 square foot bathroom remodel valued at $20,000. Through this study, the project team calculated the full cost of this service to be $566. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions. $-
$50
$100
$150
$200
$250
$300
$350
$400
$450
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Lake Elsinore Moreno Valley Murrieta Riverside Temecul a Residential Re-Roof
Fee Average

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Menifee’s total current fee ($ 403) and full cost calculated ($566) are lower than the jurisdictional average of $626. Corona ($894), Hemet ($908), and Moreno Valley ($1,415) all charge a higher fee than the jurisdictional average. The rest of the cities charge less than the jurisdictional average, ranging from a low of $108 for Perris to a high of $562 for Lake Elsinore.

16 Single Family Air-Handling/Condensing Unit (HVAC)
Currently, the Building Department charges a $160 fee for a single-family air - handling/condensing unit (HVAC). Through this study, the project team calculated the full cost of this service to be $160. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($160) and full cost ($160) are equal; however, both are slightly higher than the jurisdictional average of $153. Moreno Valley ($260) and Temecula ($320) both charge a higher fee than the jurisdictional average. With the exception of Perris, which doesn’t have a fee for HVAC, the rest of the cities charge less than the $-
$500
$1,000
$1,500
Menifee -
Current
Menifee -
Full Cost
Corona Hemet Lake
Elsinore
Moreno
Valley
Murrieta Perris Riverside Temecula
Bathroom Remodel, Valued at $20,000, 500 Sq. Ft.

Fee Average
$-
$50
$100
$150
$200
$250
$300
$350
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Lake Elsinore Moreno Valley Murrieta Riverside Temecul a Single Family Air-Handling/Condensing Unit (HVAC)
Fee Average

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jurisdictional average, ranging from a low of $48 for Lake Elsinore to a high of $134 for Corona.

17 Water Heater
Currently, the Building Department charges an $110 fee for a water heater. Through this study, the project team calculated the full cost of this service to be $160. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($110) and full cost calculated ($160) are higher than the jurisdictional average of $106. Corona ($108), Hemet ($138), and Temecula ($246) all charge a higher fee than the jurisdictional average. With the exception of Perris, which doesn’t have a water heater fee, the rest of the cities charge less than the jurisdictional average, ranging from a low of $39 for Riverside to a high of $90 for Moreno Valley.

18 New Single-Family Home, Valued at $300,000, 2,000 sq. ft.

Currently, the Building Department charges a total fee of $ 10,078 for plan check and permit fee of a new 2,000 square foot single-family home valued at $300,000. Through this study, the project team calculated the full cost of this service to be $ 8,814. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.
$-
$50
$100
$150
$200
$250
$300
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Lake Elsinore Moreno Valley Murrieta Riverside Temecul a Water Heater
Fee Average

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Menifee’s total current fee ($ 10,078) and the total full cost calculated ($ 8,814) are both significantly higher than the jurisdictional average of $2,925. Corona ($2,981), Lake Elsinore ($3, 795), and Moreno Valley ($ 4,053) all charge more than the jurisdictional average but significantly less than Menifee’s calculated full cost. With the exception of Perris, which doesn’t have a valuation fee for a new single-family home, the rest of the cities charge less than the jurisdictional average and less than Menifee’s current fee. The fees from these cities range from a low of $2,235 for Riverside to a high of $2,539 for Murrieta.

19 Single Family Residential Addition, Valued at $25,000, 200 sq. ft.

Currently, the Building Department charges a total fee of $1,330 for plan check and permit fee of a 200 square foot single-family residential addition valued at $25,000. Through this study, the project team calculated the full cost of this service to be $2,441. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Lake Elsinore Moreno
Valley
Murrieta Riverside Temecul a
New Single Family Home, Valued at $300,000, 2,000 Sq Ft Plan Check Pe rmit Fe e Average
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Lake Elsinore Moreno
Valley
Murrieta Riverside Temecul a
Single Family Residential Addition Valued at $25,000, 200 sq ft Plan Check Pe rmit Fe e Average

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Menifee’s total current fee ($ 1,330) and the total full cost calculated ($ 2,441) are both higher than the jurisdictional average of $919 . Corona ($1,025), Hemet ($2,153) and Moreno Valley ($1,385) all charge more than the jurisdictional average but less than Menifee’s calculated full cost. With the exception of Perris, which doesn’t have a valuation fee for single-family residential addition, the rest of the cities charge less than the jurisdictional average, ranging from a low of $250 for Temecula to a high of $683 for Lake Elsinore.

20 New Commercial Business Valued at $2M, 10,000 sq. ft.

Currently, the Building Department charges a total fee of $ 53,279 for plan check and permit fee of a 10,000 square foot new commercial business valued at $2 million.

Through this study, the project team calculated the full cost of this service to be $28,645.

The following graph shows how the department’s current fee and full cost compare t o the surveyed jurisdictions.

Menifee’s total current fee ($53,279) and the total full cost calculated ($28,645) are both significantly higher than the jurisdictional average of $10,736. Corona ($14,724) and Lake Elsinore ($19,461) both charge more than the jurisdictional average. With the exception of Perris, which doesn’t have a valuation fee for new commercial business, the rest of the cities charge less than the jurisdictional average, ranging from a low of $5,311 for Hemet to a high of $9,924 for Murrieta.

21 Commercial Tenant Improvement (TI) Valued at $50,000, 500 sq. ft.

Currently, the Building Department charges a total fee of $1,211 for plan check and permit fee of a 500 square foot commercial tenant improvement valued at $50,000. Through this study, the project team calculated the full cost of this service to be $4,746. The following $-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Lake Elsinore Moreno
Valley
Murrieta Riverside Temecul a
New Commercial Business Valued at $2M, 10,000 sq ft
Plan Check Pe rmit Fe e Average

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graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s total current fee ($1,211) is less than the jurisdictional average of $2,290, while the total full cost calculated ($ 4,746) is higher. Corona ($7,482) charges more than the jurisdictional average and the total full cost calculated, while Moreno Valley ($3,080) only charges more than the average. With the exception of Perris, which doesn’t have a valuation fee for commercial tenant improvements, the rest of the cities charge less than the jurisdictional average, ranging from a low of $709 for Riverside to a high of $1,823 for Murrieta.

22 Conditional Use Permit (CUP) - Major
Currently, the Planning Department charges $13,496 for a major conditional use permit (CUP). Through this study, the project team calculated the full cost of this service to be $17,822. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Lake Elsinore Moreno
Valley
Murrieta Riverside Temecul a
Commercial Tenant Improvement (TI) Valued at $50,000, 500 sq ft Plan Check Pe rmit Fe e Average
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
Menifee -
Current
Menifee -
Full Cost
Corona Hemet Lake
Elsinore
Moreno
Valley
Murrieta Pe rris Riverside Temecul a
Conditional Use Permit - Major

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Menifee’s current fee ($13,496) and the full cost calculated ($1 7,822) are both significantly higher than the jurisdictional average of $6,991. Additionally, Lake Elsinore ($8,716), Moreno Valley ($10,926), and Riverside ($8,615) all charge significantly more than the jurisdictional average. The rest of the cities charge less than the jurisdictional average, ranging from a low of $4,089 for Temecula to a high of $6,910 for Corona.

23 Final Site Development
Currently, the Planning Department charges $5,845 for a commercial final site development for 1 acre. Through this study, the project team calculated the full cost of this service to be $5,633. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($5,845) and the full cost calculated ($5,633) are both lower than the jurisdictional average of $6,389. Corona and Moreno Valley both do not charge a fee for final site development. With the exception of Murrieta, which charges a $20 ,000 deposit, the rest of the cities charge less than the jurisdictional average. Their fees range from a low of $100 for Perris to a high of $9,674 for Lake Elsinore.

24 Pre-Application Review
Currently, the Planning Department charges $1,442 for a pre-application review. Through this study, the project team calculated the full cost of this service to be $8, 561. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.
$-
$5,000
$10,000
$15,000
$20,000
$25,000
Menifee -
Current
Menifee - Full
Cost
Hemet Lake Elsinore Murrieta Pe rris Riverside Temecul a Final Site Development

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Menifee’s current fee ($1,442) is less than the jurisdictional average of $1,467, while the full cost calculated ($8,561) is significantly higher than the average. It is important to note that the City has traditionally subsidized this fee, which is why it’s current fee is so much lower than it’s full cost. Lake Elsinore ($3,813) charges more than the jurisdictional average but less than Menifee’s total full cost calculated. The rest of the cities charge less than the jurisdictional average, ranging from a low of $271 for Hemet to a high of $1,000 for Murrieta.

25 Temporary Use Permit (TUP) - Minor
Currently, the Planning Department charges $695 for a minor temporary use permit (TUP).

Through this study, the project team calculated the full cost of this service to be $1,351.

The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($695) and the full cost calculated ($1,351) are both higher than the jurisdictional average of $197. Moreno Valley ($329), Murrieta ($430), and Riverside ($200) all charge more than the jurisdictional average but less than Menifee’s full cost calculated. The rest of the cities charge less than the jurisdictional average, ranging from a low of $80 for Lake Elsinore to a high of $160 for Corona. $-
$2,000
$4,000
$6,000
$8,000
$10,000
Menifee - Current Menifee - Full Cost Hemet Lake Elsinore Moreno Valley Murrieta Pre-Application Review
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
Menifee -
Current
Menifee -
Full Cost
Corona Hemet Lake
Elsinore
Moreno
Valley
Murrieta Pe rris Riverside Temecul a
Temporary Use Permit - Minor

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26 Zoning Information Letter
Currently, the Planning Department charges $375 for a zoning information letter. Through this study, the project team calculated the full cost of this service to be $472. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($375) and the full cost calculated ($472) are both higher than the jurisdictional average of $177. Corona ($330), Murrieta ($347), and Riverside ($219) all charge more than the jurisdictional average but less than Menifee’s full cost calculated.

With the exception of Lake Elsinore, which does not charge a fee for a zoning information letter, the rest of the cities charge less than the jurisdictional average. The fees range from a low of $31 for Temecula to a high of $150 for Hemet.

27 Public Improvement Valued at $100,000
Currently, the Engineering Department charges a total fee of $7,630 for plan check and inspection for a five-sheet public improvement valued at $100,000. Through this study, the project team calculated the full cost of this service to be $11,724. The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

$-
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Moreno
Valley
Murrieta Pe rris Riverside Temecul a
Zoning Information Letter
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Menifee -
Current
Menifee - Full
Cost
Corona Hemet Lake Elsinore Moreno
Valley
Murrieta Riverside Temecul a
Public Improvement Valued at $100,000
Plan Check Inspection Average

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Menifee’s current fee ($7,630) is lower than the jurisdictional average of $7,801, while the full cost calculated ($12,298) is significantly higher than the average. Hemet ($8,000), Murrieta ($12,500), and Riverside ($8,357) are all above the jurisdictional average, while Lake Elsinore ($5,600) and Temecula ($7,200) fall below the average. The inspection fee for Corona is based on a despite set by the city, due to this their fee of $3,500 only addressed plan check. Moreno Valley’s fee of $9,450 is a deposit.

28 Final Tract Map 21-50 Lots
Currently, the Engineering Department charges $14,495 for a final tract map of 21 lots.

Through this study, the project team calculated the full cost of this service to be $13,726.

The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($14,495) and the full cost calculated ($1 3,726) are both significantly higher than the jurisdictional average of $6,605. Hemet ($15,000), Murrieta ($10,000), and Temecula ($6,885) all charge more than the jurisdictional average.

Corona’s fee of $6,415 is a deposit. The rest of the cities charge less than the jurisdictional average, ranging from a low of $1,500 for Perris to a high of $6,011 for Moreno Valley.

29 Lo t Line Adjustment/Merger
Currently, the Engineering Department charges $3,940 for a lot line adjustment/merger.

Through this study, the project team calculated the full cost of this service to be $4,228.

The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
Menifee -
Current
Menifee -
Full Cost
Corona Hemet Lake
Elsinore
Moreno
Valley
Murrieta Pe rris Riverside Temecul a
Final Tract Map 21-50 Lots
Fee Average

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Menifee’s current fee ($3,940) and the full cost calculated ($4,228) are both higher than the jurisdictional average of $1,847. Corona ($3,875), Murrieta ($3,300), and Riverside ($3,260) all charge more than the jurisdictional average but less than Menifee’s current fee. The rest of the cities charge less than the jurisdictional average.

30 Certificate of Compliance
Currently, the Engineering Department charges $3,650 for a certificate of compliance.

Through this study, the project team calculated the full cost of this service to be $3,542.

The following graph shows how the department’s current fee and full cost compare to the surveyed jurisdictions.

Menifee’s current fee ($3,650) and the full cost calculated ($3,542) are both significantly higher than the jurisdictional average of $1,379.02. Corona ($2,800), Murrieta ($2,000), Perris ($1,608), and Temecula ($1,594) all charge more than the jurisdictional average but less than Menifee’s current fee. The rest of the cities charge less than the $-
$1,000
$2,000
$3,000
$4,000
$5,000
Menifee - Current Menifee - Full
Cost
Corona Moreno Valley Murrieta Riverside Temecul a
Lot Line Adjustment/Merger
Fee Average
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Menifee -
Current
Menifee -
Full Cost
Corona Hemet Lake
Elsinore
Moreno
Valley
Murrieta Pe rris Riverside Temecul a
Certificate of Compliance
Fee Average

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jurisdictional average, ranging from a low of $450 for Lake Elsinore to a high of $1,009 for Hemet.
5 Summary
Based upon the comparative survey, the City’s full cost is generally higher than current fees charged and both are generally higher than the average of current fees surveyed of surrounding jurisdictions. It is important to note that many surrounding jurisdictions have not conducted comprehensive fee studies and as such may not reflect the current full cost of their services. Additionally, the results of this survey only show the fees adopted by council, not the cost recovery policy decisions for departments or a jurisdiction. As such, the results of this survey should be used as a secondary decision-making tool.

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15. Development Services Surcharges

There are two typical surcharges assessed as part of the development review process – General Plan Maintenance and Technology fee. The City of Menifee currently charges a General Plan Maintenance fee as part of the building phase but does not assess a Technology Fee. The following subsections discuss the calculation of the General Plan Maintenance Fee and creation of a Technology Fee.
1 General Plan Maintenance Fee
The City of Menifee currently assesses a General Plan Maintenance Fee as part of its building permit process. The fee is meant to account for updates to the general plan, zoning ordinance, housing elements, and other long-range planning activities that are part of the larger General Plan. This is a fairly typical fee charged by many jurisdictions. The City of Menifee currently charges this fee as a percentage of the building permit fee , at the time of building permit submittal. The concept behind charging it during the building permit phase is that any development project, which gets to that phase, makes enough of an impact to require the need for an update to the Zoning Code or the General Plan.

The project team worked with staff in the Planning Division to estimate the annual percentage of time spent by staff as it relates to long-range planning. In addition to internal staff cost there are contracted costs associated with updates to the General Plan and Zoning Code. The following table shows by cost component the total cost associated with each type of cost factor, the life of the cost factor, and the resulting annual cost:

Table 30: General Plan Maintenance Fee Cost Components

Cost Category % of Time Cost Life (Yrs) Total Annual Cost Senior Planner 50%39 $126,771 1 $126,771
Assistant Planner 50%40 $105,951 1 $105,951
Director 10% $38,358 1 $38,358
Manager 20% $63,470 1 $63,470
Management Analyst 5% $10,966 1 $10,966
Principal Planner 5% $13,663 1 $13,663
Subtotal Staffing Costs $359,180
General Plan Update $1,500,000 15 $100,000
Housing Element Update $500,000 8 $62,500
Subtotal Contractual Costs $162,500
Total General Plan Maintenance Annual Cost $521,680

39 Only 50% of one Senior Planner is specifically dedicated to General Plan efforts; remaining 50% is for other long -range and policy projects.
40 Only 50% of one Assistant Planner is specifically dedicated to General Plan efforts; remaining 50% is for other long-range and policy projects.

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The total annual costs associated with updating the General Plan are approximately $522,000; of which staff costs represents $359,000. It is important to note that the staff costs in the table are representative of fully burdened hourly rates and billable time.

In order to assess this fee as a percentage of the building permit fee, the project team took the annual cost associated with general plan upkeep and divided it by the average total building permit revenue for FY19-20 and FY20-21. The following table shows this calculation:

Table 31: General Plan Maintenance Fee Calculation

Category Amount
Total General Plan Annual Maintenance Cost $521,680
Average Annual Building Permit Revenue $5,938,176
General Plan Maintenance Fee 11%

As the table indicates, the calculated General Plan Maintenance Fee is 11% of the building fee. The following table compares the city’s current fee to the full cost fee calculated through this study:

Table 32: General Plan Maintenance Fee Per Unit Result Comparison

Category Current Fee Full Cost Surplus / (Deficit)
General Plan Maintenance Fee 5% 9% (4%)

The City’s current fee is 5% of the building permit. Therefore, the full cost fee would result in an increase of the City’s current fee from 5% to 9%.

As part of this analysis, the project team conducted a comparative survey of other local jurisdictions and their assessment of the General Plan Maintenance Fee. Like other comparative efforts, the survey below simply shows the fees charged by the jurisdict ion and does not include the basis upon which the other jurisdictions calculated or developed their fee. The following table shows the results of this comparative analysis:

Table 33: General Plan Maintenance Fee – Comparative Survey

Jurisdiction Fee Amount
Corona 5% of Building Permit Fee
Hemet 0.18% of Building Valuation
Murrieta $50 per Planning Application and Building Permit Riverside 10% of Building Permit Fee

As the table indicates some of the surrounding jurisdictions charge a General Plan Fee.

Not all cities charge the fee in a similar manner, for example Corona and Riverside charge it as a percentage of the building permit fee, whereas Hemet charges it as a percentage

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of the building valuation. The City’s full cost fee of 9% would be above Corona but lower than Riverside. Updating the City’s General Plan Maintenance fee will allow the Menifee to be in alignment with other jurisdictions and better recover its costs for long-range planning efforts.
2 Technology Surcharge Fee
The City does not currently collect a Technology Fee. The Technology Fee allows the City to support the costs associated with the City’s permitting system, staff time for managing the systems, acquiring the system, mobile devices used for permitting, etc. The following table shows by cost category, the total cost, the quantity of items, the number of years the item or cost is related to, and the resulting annual cost:

Table 34: Technology Surcharge Fee Cost Components

Item Cost Qty Total Cost # of Years Annual Cost
Bluebeam Revu $504 55 $27,720 1 $27,720
Accela Civic Platform and Citizen Access $122,280 1 $122,280 1 $122,280 QLESS $8,333 1 $8,333 1 $8,333
IT Internal Support

Planning IT Support $203,184 0.8541 $172,706 1 $172,706 Fire IT Support $128,736 1 $128,736 1 $128,736
Bldg IT Support $232,655 1 $232,655 1 $232,655
Eng IT Support $299,828 0.8542 $248,854 1 $248,854
Total Tech Fee Costs $947,284

Based upon development-related services technology needs, as well as internal IT staff and operational support, the annual technology fee costs are approximately $947,000

Working with City staff, the project team determined that the most relatable nexus for the Technology Fee is proportionate to the permit fee. This means, the greater the permit fee, the greater the Technology Fee as there is more software utilization and storage space for larger projects. Therefore, the project team took the total Technology Annual Cost and divided it by the average total permit revenue associated with Building, Fire, Planning, and Engineering services for FY19-20 and FY20-21. The following table shows this calculation:

Table 35: Technology Fee Calculation

Category Amount
Total Technology Annual Cost $947,284
Total Projected Development Permit Cost $14,640,022
Technology Fee as % of Permit Fee 6%

41 This has been prorated as 15% of Planning staff work on long -range planning or non-current planning activities. 42 This has been prorated as 15% of Engineering staff work on CIP related construction inspections.

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Based upon this calculation, the City’s technology fee would be 6% of the permit fee.

Therefore, if a permit fee was $100, the technology fee collected would be $6; whereas if a permit fee was $1,000; the technology fee collected would be $ 60. This type of structure, enables the technology fee to be more proportionately distributed based upon the projects and their impact upon the system.

As part of this analysis, the project team conducted a comparative survey of other local jurisdictions and their assessment of a Technology Fee. Like other comparative efforts, the survey below simply shows the fees charged by the jurisdiction and does not include the basis upon which the other jurisdictions calculated or developed their fee. The following table shows the results of this comparative analysis:

Table 36: Technology Fee – Comparative Survey

Jurisdiction Fee Amount
Corona $47 per Permit
Hemet $7.25 per Permit
Moreno Valley $3 per Permit
Murrieta $5 per Permit
Riverside 10% of Building Permit and Plan Check Fee

The majority of the jurisdictions charge the Technology Fee as a per permit fee. The calculated full cost for the City at 6% of the permit fee is lower than Riverside, which is the only other city that charges a percentage of the building permit fee. Implementing this fee will allow the City a mechanism to help fund the current costs for its development- related permitting needs.
3 Surcharge Funds
It is a best practice to collect and account for General Plan Maintenance and Technology surcharges in separate accounts. The City of Menifee currently has a separate subaccount for the General Plan Maintenance Fee. Prior to implementation, the City should develop a separate fund or subaccount within the IT Fund to house the Technology Surcharge. This will ensure compliance with funding requirements, enable appropriate allocation of funds to general plan or technology-related activities, and mitigate any potential issues with comingling of funds.

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16. Annual Revenue Impact
One of the most important components of a cost of services analysis is the revenue impact associated with fees. The focus of this analysis has been all fees for service charged by the City of Menifee. There are three main types of fee categories for the City of Menifee: Administrative / Miscellaneous Fees, Community Services, and Development Services. The following subsections discuss the revenue impacts based upon these three categories.
1 Administrative / Miscellaneous Revenue Impact
Administrative and Miscellaneous Fees refer to the fees charged by Finance (Business License), City Clerk, Code Enforcement, and the Police Department. These departments provide fee-related services as an ancillary function and their revenue is a small component of their overall funding, which is primarily through general fund monies (i.e. property taxes).

As part of this analysis, the project team analyzed the revenue collected for these departments in the last fiscal year (FY2021) and compared it against the annual fee- related cost. The fee-related annual cost is calculated based upon the amount of workload processed for the different types of activities. Based upon FY21 revenue and workload, the City is under-recovering by approximately $ 117,000 or at a cost recovery level of 52%. The following table compares by Department the revenue, the annual fee- related cost, the annual surplus / (deficit), and the associated cost recovery percentage.

Department / Division
Annual Fee
Revenue
Annual Fee-Related
Expenses
Annual Surplus
/ (Deficit) Cost Recovery %
Finance $68,228 $101,021 ($32,793) 68%
Code Enforcement $2,750 $5,150 ($2,400) 53%
Police $55,255 $137,196 ($81,942) 40%
Total $126,232 $243,368 ($117,135) 52%

The largest source of under-recovery for Administrative / Miscellaneous fees is in relation to Police fees at $82,000. The City recently established its in-house Police department and as such the fees currently charged by the Department were set based upon neighboring jurisdictions and not based upon the true cost of service. Updating the fees for the Police Department based upon the current study, will allow the City to offset the under-recovery.

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For the Finance deficit of $33,000, this is primarily due to business license renewals and the sheer volume of activity. Even marginally increasing those fees will help the City better recover its costs.
2 Community Service Revenue Impact
The Community Services Department is unique compared to other City departments.

While this department is primarily public-facing, many of its services are heavily subsidized as the functions are considered to be in support of promoting public health and providing benefit to the community. Additionally, this department was much more impacted by the recent COVID-19 Pandemic, as due to government rules and regulations, many of its classes were cancelled, and facilities were closed and prevented from being rented out. Therefore, the cost recovery for this department should be analyzed separately from other City funds and departments.

As discussed, due to the unique impact of COVID-19 on this department, revenue collected in FY20 is utilized instead of FY21. For the majority of FY21, many facilities were closed and recreational activities were not offered, so the revenue does not reflect an accurate picture of the potential revenue generation for Community Services. While COVID-19 did begin in FY20, and affected revenue for the last quarter of FY20, it still seems to be a fairer representation as it includes revenue for summer, fall, and winter, and some of spring.

The revenue for this department was compared against the annual fee-related cost. The annual fee-related cost was calculated by estimating the percentage of time spent by staff on fee-related activities, compared to general park maintenance or city subsidized programs. The following table compares the revenue, the annual fee-related cost, the annual surplus / (deficit), and the associated cost recovery percentage.

Department
Annual Fee
Revenue
Annual Fee-Related
Expenses
Annual Surplus
/ (Deficit) Cost Recovery %
Community Services $225,203 $2,638,874 ($2,413,671) 9%

Based upon FY20 revenue, and FY22 fee-related annual expenses, the Community Services Department is under-recovering for its services by approximately $2.4 million.

The $2.4 million deficit represents 9% cost recovery. This cost recovery is lower than the average of 20-40% that is typically seen for Recreation Services. However, it is typical that this department usually represents the largest portion of fee subsidies within a City. 3 Development Services Revenue Impact
The last set of departments / divisions reviewed were in relation to private development activity. This includes Building, Planning, Fire, and Engineering. These departments /

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divisions primarily service the public and the majority of their expenditures are fee- related. It is also important to note that there is a lot of inter -dependence among these departments / divisions. Building staff will review Planning applications, Planning staff provide support on Building and Engineering Fees, and Fire staff will review and inspect Building, planning, and Engineering applications. Therefore, when evaluating these services, it is important to not only evaluate the individual fees, but look at the overall revenue impact for these departments / divisions.

Similar to Administrative / Miscellaneous fees, the revenue utilized was FY21 actual revenue for these departments / divisions. However, for the Building division this revenue was further manipulated and analyzed as building permit and plan check fees are collected up front, but the revenue can represent multiple years’ worth of activity. Since the cost only represents one years’ worth of services, the revenue for Building was annualized to better represent the true annual revenue.

The annual development revenue is compared against the annual fee-re lated cost. The annual fee-related cost includes both the direct cost and any indirect costs allocated to the department / division from the Citywide cost allocation plan. For these departments / divisions the fee-related cost is typically the majority of the department’s costs. The exception to this is that for Fire, the cost only represents the costs associated with the in- house Fire Marshal division as well as the Fire Prevention staff. For Planning, the costs only represent current planning efforts, as long-range is captured through the General Plan Fee surcharge, and for Engineering, the costs only represent development activity and not costs related to capital improvements or City projects.

Based upon FY21 revenue, and the calculated annual fee-relate d cost, the City is under- recovering for development-related activities by approximately $ 816,000 or at a cost recovery level of 91%. The following table compares by Department the revenue, the annual fee-related cost, the annual surplus / (deficit), and the associated cost recovery percentage.

Department / Division
Annual Fee
Revenue
Annual Fee-Related
Expenses
Annual Surplus
/ (Deficit) Cost Recovery %
Building $3,922,166 $2,884,361 $1,037,806 136%
Planning $1,634,366 $2,315,437 ($681,071) 71%
Fire $646,692 $1,401,217 ($754,525) 46%
Engineering $2,295,479 $2,713,214 ($417,735) 85%
Total $8,498,703 $9,314,229 ($815,526) 91%

The largest source of deficit for development services is Fire at $754,000 followed by Planning at $681,000. The Building Division is showing an over-recovery of $ 1.0 million.

However, for all of these divisions, the revenue collected is the revenue collected by the Department / division, but it may account for more than that Department / Division’s cost.

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For example, Building’s revenue includes support for Planning and Engineering, as the City does not currently have a separate fee for those reviews and inspections. Going forward there will be a separate fee, so it will be easier to separate. Similarly, the revenue for Planning may include revenue for Fire and Engineering. Therefore, the cost recovery must be evaluated together for these four departments / divisions, which shows an overall deficit. Adopting the full cost fees, as well as new cross-departmental support fees identified in this report, will allow the City to better recover all of its development- related costs.

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17. Cost Recovery Considerations
The following sections provide guidance regarding how and where to increase fees, determining annual update factors, and developing cost recovery policies and procedures.
1 Fee Adjustments
This study has documented and outlined on a fee-by-fee basis where the City is under and over collecting for its fee-related services. City and Department management will now need to review the results of the study and adjust fees in accordance with Departmental and City philosophies and policies. The following dot point s outline the major options the City has in adjusting its fees.
• Over-Collection: Upon review of the fees that were shown to be over-collecting for costs of services provided, the City should reduce the current fee to be in line with the full cost of providing the service.

• Full Cost Recovery: For fees that show an under-collection for costs of services provided, the City may decide to increase the fee to full cost recovery immediately.

• Phased Increase: For fees with significantly low cost recovery levels, or which would have a significant impact on the community, the City could choose to increase fees gradually over a set period of time.

The City will need to review the results of the fee study and associated cost recovery levels and determine how best to adjust fees. While decisions regarding fees that currently show an over -recovery are fairly straight forward, the following subsections, provide further detail on why and how the City should consider either implementing Full Cost Recovery or a Phased Increase approach to adjusting its fees. 1 Full Cost Recovery
Based on the permit or review type, the City may wish to increase the fee to cover the full cost of providing services. Certain permits may be close to cost recovery already, and an increase to full cost may not be significant. Other permits may have a more significant increase associated with full cost recovery.

Increasing fees associated with permits and services that are already close to full cost recovery can potentially bring a Department’s overall cost recovery level higher. Often,

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these minimal increases can provide necessary revenue to counterbalance fees which are unable to be increased.

The City should consider increasing fees for permits for which services are rarely engaged to full cost recovery. These services often require specific expertise and can involve more complex research and review due to their infrequent nature. As such, setting these fees at full cost recovery will ensure that when the permit or review is requested, the City is recovering the full cost of its services.
2 Phased Increases
Depending on current cost recovery levels some current fees may need to be increased significantly in order to comply with established or proposed cost recovery policies. Due to the type of permit or review, or the amount by which a fee needs to be increased, it may be best for the City to use a phased approach to reaching their cost recovery goals.

As an example, you may have a current fee of $200 with a full cost of $1,000, representing 20% cost recovery. If the current policy is 80% cost recovery, the current fee would need to increase by $600, bringing the fee to $800, in order to be in compliance. Assuming this particular service is something the City provides quite often, and affects various members of the community, an instant increase of $600 may not be feasible. Therefore, the City could take a phased approach, whereby it increases the fee annually over a set period until cost recovery is achieved.

Raising fees over a set period of time not only allows the City to monitor and control the impact to applicants, but also ensure that applicants have time to adjust to significant increases. Continuing with the example laid out above, the City could increase the fee by $150 for the next four years, spreading out the increase. Depending on the desired overall increase, and the impact to applicants, the City could choose to vary the number of years by which it chooses to increase fees. However, the project team recommends that the City not phase increases for periods greater than five years, as that is the maximum window for which a comprehensive fee assessment should be completed. 2 Annual Adjustments
Conducting a comprehensive analysis of fee-related services and costs annually would be quite cumbersome and costly. The general rule of thumb for comprehensive fee analyses is between three and five years. This allows for jurisdictions to ensure they account for organizational changes such as staffing levels and merit increases, as well as process efficiencies, code or rule changes, or technology improvements. The City of Menifee already follows this best practice and should continue with this practice.

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Additionally, the City should also continue its practice of annually updating its fees based upon the regional CPI. This ensures that any increases in costs are captured in fees and proposed cost recovery levels are maintained in between comprehensive updates. 3 Policies and Procedures
This study has identified the areas where the City is under-collecting the cost associated with providing services. This known funding gap is therefore being subsidized by other City revenue sources. Development of cost recovery policies and procedures will serve to ensure that current and future decision makers understand how and why fees were determined and set, as well as provide a road map for ensuring consistency when moving forward.

It is typically recommended that private benefit (development-related activities) are set at 100% cost recovery, whereas other more community benefitted activities typically have lower cost recovers in the range of 20-50% (i.e. Community Services, Finance, Police, etc.) A department specific cost recovery policy would allow the City to better control the cost recovery associated with different types of services being provided and the community benefit received.

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June 21, 2022