Palo Alto City Council
September 8, 2025

Item No. 4 Page 1 of 1

Finance Committee
Supplemental Report
From: Lauren Lai, Administrative Services Director
Meeting Date: May 20, 2025
Item Number: 2
Report #:2505-4644
TITLE
Supplemental Report - Recommendation to the City Council to Approve the Citywide Cost of Services Study and Proposed Municipal Fee Adjustments

BACKGROUND
This is informational only and Committee action is not required.

On April 29, 20251, staff presented Item 2 to the Finance Committee. An error was identified in Attachment B: Citywide Cost of Services Study Report, on pages 29 and 40, which incorrectly referenced the City of Thousand Oaks.

ATTACHMENTS
Attachment A: Citywide Cost of Services Study Report – Corrected APPROVED BY:

Lauren Lai, Administrative Services Director
1 Finance Committee, April 29, 2025; Agenda Item #2; SR#2503-4351, https://portal.laserfiche.com/Portal/DocView.aspx?id=167675&repo=r-704298fc Item 2
Item 2 Supplemental
Report

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PALO ALTO, CA
COST OF SERVICES (USER FEE) STUDY – MUNICIPAL FEES MAY 2025 Item 2
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MATRIX CONSULTING GROUP
INTRODUCTION AND EXECUTIVE SUMMARY 1 LEGAL FOUNDATIONS AND POLICY 3 USER FEE STUDY METHODOLOGY 6 RESULTS OVERVIEW 8 OFFICE OF THE CITY CLERK 9 COMMUNITY SERVICES 11 FIRE EMS 17 POLICE 24 POLICE – ANIMAL CONTROL 28 PUBLIC WORKS 31 REAL ESTATE AND PROPERTY MANAGEMENT 34 REVENUE COLLECTION 36 COST RECOVERY CONSIDERATIONS 37

TABLE OF CONTENTS
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The report, which follows, presents the results of the Cost of Services (User Fee) Study conducted by Matrix Consulting Group for the City of Palo Alto, California. PROJECT BACKGROUND AND OVERVIEW The purpose of this study is to evaluate and determine the full cost (direct and indirect) of providing a variety of city services. Matrix Consulting Group analyzed the cost-of-service relationships that exist between fees for service activities in the following departments: City Clerk, Revenue, Real Estate, Public Works, EMS, and Community Services. The results of this study provide a tool for understanding current service levels and the cost for those services. GENERAL PROJECT APPROACH AND METHODOLOGY The methodology employed by 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 2025 Budgeted salaries, benefits, and allowable expenditures. Indirect Program, departmental, clerical, and Citywide support. Together, the cost components in the table above comprise the calculation of the total “full” cost of providing a service, regardless of whether a fee for that service is charged. The work accomplished by Matrix Consulting Group in the analysis of the proposed fees for service involved the following steps: • Department / Program Staff Interviews: The project team interviewed department / program staff regarding their needs for clarification to the structure of existing fee items or for addition of new fee items. • Data Collection: Data was collected for each permit / service, including time estimates. In addition, all budgeted costs and staffing levels for Fiscal Year 2025 were entered into Matrix Consulting Group’s analytical software model. • Cost Analysis: The full cost of providing each service included in the analysis was established.

INTRODUCTION AND EXECUTIVE SUMMARY
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• 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 and legal and policy considerations are provided in subsequent chapters of this report. SUMMARY OF RESULTS Overall, this study found that the City is under-recovering for most of its administrative, EMS, Public Works, and Recreation services. Each of these service areas serve a different population and constituency and should be reviewed individually to determine how and where fees should be set. CONSIDERATIONS FOR COST RECOVERY POLICY AND UPDATES Matrix Consulting Group recommends that the City use the information contained in this report to review current Cost Recovery Policies, including mechanisms for the annual update of fees for service. ADOPT A FORMAL COST RECOVERY POLICY The Government Finance Officers Association’s (GFOA) best practices for Establishing Government Charges and Fees states that governmental entities should adopt formal policies regarding charges and fees which include the jurisdiction’s intention to recover the full cost or partial costs of providing services, sets forth circumstances under which the jurisdiction might set a charge for fee at less than or more than 100% of full cost, and outlines the considerations that might influence the jurisdiction’s pricing decision. 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. Matrix Consulting Group recommends that the City continue to review, update, and apply its formalized cost recovery policies to each service area included in this Study. 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. GFOA best practices for Establishing Government Charges and Fees states that governmental entities should review, and update charges and fees periodically based on factors such as the impact of inflation, other cost increases, adequacy of cost recovery, use of services, and the competitiveness of current rates to avoid large infrequent fee increases. Therefore, it is recommended the City establish a practice of conducting comprehensive analyses every five to seven years to captures any changes to organizational structure, processes, code amendments, as well as any new service areas. In between comprehensive updates, the City should continue its practice of updating fees annually based on internal cost factors Item 2
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This section of the report is intended to provide an overview of the legal rules and regulations that govern what is considered a fee for service, how those fees can be calculated, general principles, philosophies, and general policy considerations for setting fees for service. LEGAL FRAMEWORK A “user fee” is a charge for service provided by a governmental agency to a public citizen or group. California has several Government Codes and Propositions that regulate fees for service, with the purpose of ensuring that fees are reasonable and justified. The most prominent and relevant of these includes: • Proposition 26: Passed in 2010, specifically outlined the difference between a fee and a tax and dictates that fees must be directly related to a service and cannot exceed the reasonable cost of that service. • Government Code § 50076: clarifies that fees for service costs are not special taxes and do not need voter approval. • Government Code § 65104: gives local governments the authority to charge planning and zoning fees to recover processing costs. When determining fees for service it is important to ensure there is a direct benefit – the service is provided directly to the payer, and that it is cost based, and does not exceed the reasonable cost of providing the service. EXCEPTIONS TO THE RULE While Proposition 26 defines what constitutes a user fee, and how those fees can be determined, it also provides a key exception for fees charged for facility or property rentals. This exception outlines that fees for use of government property (e.g., renting public buildings, parks, or event spaces) are voluntary transactions. Therefore, governments can charge market-based rental fees for these services. 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:

LEGAL FOUNDATIONS AND POLICY
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TABLE 2: SERVICES IN RELATION TO BENEFIT RECEIVED

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, have 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 fees, and other funding sources. Finally, in the “individual / 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: v 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. v 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” no longer applies. The charge then becomes 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. 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, it is essential that jurisdictions prioritize the use of revenue sources for the provision of services based on the continuum of benefit received. "Global" Community Benefit •Police •Park Maintenance •Fire Suppression "Global" Benefit and an Individual or Gorup Benefit •Recreation / Community Services •Fire Prevention Individual or Group Benefit •Building Permits •Planning and Zoning Approval •Engineering Development Review Item 2
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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 on the jurisdiction’s ability to charge a fee. Examples 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 changing a water heater in residential home is higher than the cost of the water heater itself, many citizens will avoid pulling the permit. • 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. 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. 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. Where subsidies are identified, they City should increase the fees to reduce the deficit; where over-recoveries are identified, the fee must be reduced to comply with the law.

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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 the project team to determine allocations of cost components to a particular fee or service are: • Calculate fully burdened hourly rates by position, including direct and indirect costs; • Develop time estimates for the average time spent to deliver each service included in the study; and • 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 given that 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. • Estimates reflect the time associated with the position or positions that typically perform a service. • 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.

DIRECT (Salaries, Benefits, Productive Hours) INDIRECT (Departmental Admin, Services & Supplies, Citywide Overhead etc.) Total Cost

USER FEE STUDY METHODOLOGY
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• 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 on 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 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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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 to maintain control over the policy and management of these 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 financial and operational information is utilized. 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: discussions regarding any proposed 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). • Annualized Results: utilizing volume of activity estimates annual subsidies and revenue impacts were projected where appropriate. The full analytical results were provided to City staff under separate cover from this summary report.

RESULTS OVERVIEW
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The Office of the City Clerk serves as a municipal recordkeeper, with duties that include processing ordinances and resolutions, preparing Council agendas and minutes, and managing municipal elections. This Office also acts as the City’s repository for records and process records requests. The fees examined within this study relate to appeals, documents & photocopies, domestic partner registries, and subscriptions. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Office of the City Clerk. FEE SCHEDULE MODIFICATIONS In discussions with City Clerk staff, the following modifications to the current fee schedule were proposed: • Eliminated Fees: the ‘Certification Fee’ was removed from the schedule as this service is no longer provided by Clerk staff. • New Fees: fees for ‘Black and White’, ‘Color’, and ‘Digital Copy’ services were added to the fee schedule to collect additional revenues for these services. The modifications noted above ensure that the proposed fee schedule better reflets the services being provided by City Clerk staff. DETAILED RESULTS The Office of the City Clerk collects fees for appeals, document and photocopy services, domestic partner registries, and subscription related services. The total cost calculated for each service includes direct staff costs, and Departmental and Citywide overhead. The following table details the fee name, current fee, total cost, and difference associated with each service offered. TABLE 3: TOTAL COST PER UNIT RESULTS – CITY CLERK Fee Name Unit Current Fee Total Cost Difference Appeals Appeal Costs Exceeding Appeals Filing Fee Deposit Refer To Planning and Development Services Appeals and Request for Hearing before City Council or Planning & Transportation Commission Each Refer To Planning and Development Services Documents & Photocopies Fair Political Practices Commission Photocopies1 Per Page $0.10 $0.10 $0 Black & White2 Per Page $0.10 $0.10 $0 Color2 Per Page $0.25 $0.25 $0 Digital Copy3 Each Actual Cost 1 The total cost associated has been set according to CA Govt Code § 81008(a). 2 The total cost associated has been set according to GOV § 7922.530. 3 The total cost associated has been set according to GOV § 6253.9(a).

OFFICE OF THE CITY CLERK
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Fee Name Unit Current Fee Total Cost Difference Domestic Partner Registry Domestic Partners Registration Fee Each $38 $78 ($40) Subscriptions Candidate Filing Fee4 Each $25 $25 $0 Both Appeal fees refer to the Planning and Development Services section of the municipal fee schedule, as depending on the type of application being appealed, these amounts can vary. All Document and Photocopy fees, as well as Subscription fees have been set to align with state codes. The ‘Domestic Partners Registration Fee’ shows a current subsidy of $40. ANNUAL RESULTS Due to the nature of City Clerk fees, most of which are set by the state, no annual results were calculated. 4 The total cost associated has been set according to ELEC § 10228 Item 2
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The Community Services Department (CSD) provides a variety of recreational opportunities, including parks, hiking trails, fitness facilities, pools, and a municipal golf course. It also offers engaging programs for all ages, from educational classes to art exhibits and the Palo Alto Jr. Museum and Zoo. The focus of this analysis was the programmatic cost recovery associated with the following divisions: Arts and Sciences, Open Space, Parks and Golf, and Recreation and Cubberley. The following sections outline the cost recovery associated with the Community Services department as a whole, as well as each division. COMMUNITY SERVICES DEPARTMENT COST RECOVERY The typical cost recovery for parks and recreational service is between 20% and 50%. This range reflects the belief that these services primarily benefit the community at large and therefore should be subsidized through taxpayers. As part of this analysis, the project team calculated the cost recovery for the Community Services Department based on its direct costs of operations and accounting for any indirect costs (Departmental / Divisional administration and Citywide overhead). Direct cost recovery compares budgeted costs against generated revenues. To determine direct departmental cost recovery, the project team compared FY24 budgeted revenues to FY25 budgeted costs. The following table shows by program: Revenue, Budget, the associated difference, and cost recovery percentage. TABLE 4: CSD DEPARTMENTAL COST RECOVERY – DIRECT COSTS Division FY24 Rev FY25 Exp5 Cost Recovery CSD Arts and Sciences $4,673,381 $10,105,808 46% CSD Open Space, Parks and Golf $6,174,447 $16,169,915 38% CSD Recreation and Cubberley $5,853,093 $7,916,070 74% Total $16,700,920 $34,191,793 49% The Department is at a 49% cost recovery level on a direct cost basis. This direct cost recovery is on the higher end of the typical cost recovery (20-50%). The range of cost recovery levels between programs is typical for parks and recreation fees. For example, the optional nature of fees related to recreation services usually equates to those fees being set closer to cost recovery. On the other hand, services provided in relation to youth or senior services tend to be subsidized to account for the community benefit. Total cost recovery looks at direct program costs, departmental / divisional administration, and citywide overhead and compares those costs against generated revenues. For programmatic services to be provided, recreation management and administration staff support is needed. Furthermore, support 5 The FY25 Budget does not include CSD Administration, as those costs are considered part of the overhead.

COMMUNITY SERVICES
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services are also needed from other City departments, including Finance, Human Resources, City Attorney, Facility, Maintenance, and so forth. The following table shows by division the indirect costs: TABLE 5: CSD DEPARTMENTAL COST RECOVERY – INDIRECT COSTS INCLUDED Division Depart. OH6 Citywide OH Total Indirect Cost CSD Arts and Sciences $818,588 $1,876,689 $2,695,277 CSD Open Space, Parks and Golf $1,309,790 $1,684,736 $2,994,526 CSD Recreation and Cubberley $641,215 $1,297,111 $1,938,326 Total $2,769,593 $4,858,536 $7,628,129 The project team accounted for roughly $8 million in indirect overhead costs. The table below compares FY24 Revenue to FY25 Total Direct and Indirect Costs (Full Cost), highlighting the difference and associated cost recovery percentage. TABLE 6: CSD DEPARTMENTAL COST RECOVERY – FULL COSTS Division FY24 Rev FY25 Full Cost Cost Recovery CSD Arts and Sciences $4,673,381 $12,801,084 37% CSD Open Space, Parks and Golf $6,174,447 $19,164,441 32% CSD Recreation and Cubberley $5,853,093 $9,854,396 59% Total $16,700,920 $41,819,922 40% Based on the analysis, the Department has a Full Cost recovery level of 40%, which is still within the typical range of 20-50% for parks and recreation services. Of the total direct and indirect expenditures, approximately 81% are direct expenditures, 12% is Citywide overhead, and 7% is Administrative costs. ARTS & SCIENCES COST RECOVERY The Arts & Sciences Division offers a variety of visual and performing arts programs for youth and adults. Additionally, it oversees the daily operations of the Art Center, Junior Museum and Zoo (JMZ), Children’s Theatre, Community Theatre, Cubberley Theatre, the Public Art Program, and the Cubberley Artist Studios Program. The following table shows by cost center: Revenue, Budget, the associated difference, and cost recovery percentage. TABLE 7: ARTS & SCIENCES COST RECOVERY – DIRECT COSTS Division FY24 Rev FY25 Exp7 Cost Recovery Visual Arts, Classes, Exhibitions $1,458,479 $2,912,659 50% Community Theater $198,608 $526,696 38% Junior Museum & Zoo $2,226,536 $3,770,337 59% Children's Theater $784,891 $2,329,639 34% Total $4,668,515 $9,539,331 49% 6 This represents the FY25 budgeted expenditures for the CSD Community Services Administration division only as the remaining divisions (i.e. Animal Shelter, Human Services Administration, Child Care Services, etc.) are not overhead to all of CSD. 7 The FY25 Budget does not include Arts & Culture Administration, as these costs are considered part of the overhead.

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The Arts & Sciences division is at a 49% cost recovery level on a direct cost basis. This direct cost recovery is within the typical cost recovery (20-50%). The next table shows associated indirect costs included: TABLE 8: ARTS & SCIENCES COST RECOVERY – INDIRECT COSTS INCLUDED Division Depart. OH8 Citywide OH Total Indirect Cost Visual Arts, Classes, Exhibitions $299,056 $220,601 $519,657 Community Theater $54,078 $3,705 $57,783 Junior Museum & Zoo $387,117 $587,606 $974,723 Children's Theater $239,194 $394,237 $633,431 Total $979,446 $1,206,149 $2,185,595 The project team accounted for roughly $2 million in indirect overhead costs. The table below compares FY24 Revenue to FY25 Total Direct and Indirect Costs (Full Cost), highlighting the difference and associated cost recovery percentage. TABLE 9: ARTS & SCIENCES COST RECOVERY – FULL COSTS Division FY24 Rev FY25 Full Cost Cost Recovery Visual Arts, Classes, Exhibitions $1,458,479 $3,432,316 42% Community Theater $198,608 $584,479 34% Junior Museum & Zoo $2,226,536 $4,745,060 47% Children's Theater $784,891 $2,963,071 26% Total $4,668,515 $11,724,926 40% Based on the analysis, the Arts & Sciences division has a full cost recovery level of 40%. Of the total direct and indirect expenditures, approximately 82% are direct expenditures, 10% is Citywide overhead, and 8% is Administrative costs. The full cost in Table 9, which equals roughly $11.7 million, varies from the full cost in Table 6, which equals $12.8 million, due to the exclusion of direct and indirect costs in relation to program cost centers9 which do not generate revenue. These exclusions ensure the division’s full cost recovery rate is not artificially reduced. In addition to the overall cost recovery range typically seen in relation to parks and recreation fees, there are typical cost recovery target ranges based upon the Matrix Consulting Group's experience conducting recreation fee studies. On the low end, classes and programs tend to have a 30% to 50% cost recovery as the intention is to balance cost recovery without inhibiting attendance or producing barriers to entry. The Division’s classes and programs are on the higher end of this cost recovery range, which makes sense as the classes / programs offered are unique (ceramics, science, etc) and this drives the desirability. Facility rentals tend to be on the higher end at 50% to 80% cost recovery as rentals are primarily for individual 8 This represents the proportionate split of the FY25 budgeted expenditures for both the CSD Administration and Arts & Culture Administration division across all Arts & Science specific cost centers. 9 Cost centers excluded include the following: 80020210, 80020310, 80020410, 80020414, & 80020710.

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benefit and the community has the option to use the City’s facilities or other facilities based on their needs. The Divisions facility cost recoveries are lower than this cost recovery range. OPEN SPACE, PARKS & GOLF COST RECOVERY The Open Space, Parks, and Golf Division is responsible for the upkeep and operations of the City’s parkland and open spaces. Additionally, it maintains a full-service golf complex. The following table shows by cost center: Revenue, Budget, the associated difference, and cost recovery percentage. TABLE 10: OPEN SPACE, PARKS & GOLF COST RECOVERY – DIRECT COSTS Division FY24 Rev FY25 Exp10 Cost Recovery Parks $318,377 $3,263,358 10% Facilities $777,232 $8,877,486 9% Golf $5,078,837 $3,639,805 140% Total $6,174,447 $15,780,648 39% The Open Space, Parks & Golf Division is at a 39% cost recovery level on a direct cost basis. This direct cost recovery is within the typical cost recovery (20-50%). The next table shows by the indirect costs included: TABLE 11: OPEN SPACE, PARKS & GOLF COST RECOVERY – INDIRECT COSTS INCLUDED Division Depart. OH11 Citywide OH Total Indirect Cost Parks $362,910 $370,383 $733,293 Facilities $987,243 $1,129,580 $2,116,823 Golf $404,773 $128,904 $533,677 Total $1,754,926 $1,628,867 $3,383,793 The project team accounted for roughly $3 million in indirect overhead costs. The table below compares FY24 Revenue to FY25 Total Direct and Indirect Costs (Full Cost), highlighting the difference and associated cost recovery percentage. TABLE 12: OPEN SPACE, PARKS & GOLF COST RECOVERY – FULL COSTS Division FY24 Rev FY25 Full Cost Cost Recovery Parks $318,377 $3,996,651 8% Facilities $777,232 $10,994,309 7% Golf $5,078,837 $4,173,482 122% Total $6,174,447 $19,164,441 32% 10 The FY25 Budget does not include Open Space & Science Administration, as these costs are considered part of the overhead. 11 This represents the proportionate split of the FY25 budgeted expenditures for both the CSD Administration and Open Space & Science Administration division across all Open Space & Science specific cost centers.

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Based on the analysis, the Open Space, Parks & Golf division has a full cost recovery level of 2%. Of the total direct and indirect expenditures, approximately 83% are direct expenditures, 8% is Citywide overhead, and 9% is Administrative costs. Typically, maintenance cost centers are support and do not generate high levels of revenue, this is reflected in the low-cost recovery. At 124%, the Golf program generates a high amount of revenue. This excess in cost recovery is typical for specialized services. RECREATION & CUBBERLEY COST RECOVERY The Recreation and Cubberley Division is responsible for various youth and adult programming, including sports, camps, aquatics, special events, and much more. Additionally, it oversees the operations of three community centers, a teen center, the MakeX studio, and, through a public-private partnership, the Rinconada Pool. The following table shows by cost center: Revenue, Budget, the associated difference, and cost recovery percentage. TABLE 13: RECREATIONS & CUBBERLEY COST RECOVERY – DIRECT COSTS Division FY24 Rev FY25 Exp12 Cost Recovery Adult Classes & Programs $264,978 $448,565 59% Aquatics $9,717 $71,698 14% Youth Classes & Programs $1,712,792 $2,431,945 70% Recreation Facilities $2,449,245 $3,526,093 69% Parks, Fields, & Courts $1,411,534 $712,006 198% Special Events $640 $259,405 0% Total $5,848,906 $7,449,712 79% The Recreation & Cubberley division is at a 79% cost recovery level on a direct cost basis. This direct cost recovery is higher than the typical cost recovery (20-50%). The next table shows by the indirect costs included: TABLE 14: RECREATIONS & CUBBERLEY COST RECOVERY – INDIRECT COSTS INCLUDED Division Depart. OH13 Citywide OH Total Indirect Cost Adult Classes & Programs $67,290 $57,340 $124,630 Aquatics $10,755 $17,794 $28,549 Youth Classes & Programs $364,818 $129,396 $494,214 Recreation Facilities $528,952 $718,160 $1,247,112 Parks, Fields, & Courts $106,809 $281,959 $388,768 Special Events $38,914 $32,982 $71,896 Total $1,117,538 $1,237,631 $2,355,169 12 The FY25 Budget does not include Recreation & Cubberley Administration, as these costs are considered part of the overhead. 13 This represents the proportionate split of the FY25 budgeted expenditures for both the CSD Administration and Recreation & Cubberley Administration division across all Recreation & Cubberley specific cost centers.

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The project team accounted for roughly $2 million in indirect overhead costs. The table below compares FY24 Revenue to FY25 Total Direct and Indirect Costs (Full Cost), highlighting the difference and associated cost recovery percentage. TABLE 15: RECREATIONS & CUBBERLEY COST RECOVERY – FULL COSTS Division FY24 Rev FY25 Full Cost Cost Recovery Adult Classes & Programs $264,978 $573,195 46% Aquatics $9,717 $100,247 10% Youth Classes & Programs $1,712,792 $2,926,160 59% Recreation Facilities $2,449,245 $4,773,206 51% Parks, Fields, & Courts $1,411,534 $1,100,773 128% Special Events $640 $331,301 0% Total $5,848,906 $9,804,881 60% Based on the analysis, the Recreation & Cubberley division has a full cost recovery level of 60%. Of the total direct and indirect expenditures, approximately 76% are direct expenditures, 13% is Citywide overhead, and 11% is Administrative costs. The full cost in Table 15, which equals roughly $9.80 million, varies from the full cost in Table 6, which equals $9.85 million, due to the exclusion of direct and indirect costs in relation to program cost centers14 which do not generate revenue. These exclusions ensure the division’s full cost recovery rate is not artificially reduced. In addition to the overall cost recovery range typically seen in relation to parks and recreation fees, there are typical cost recovery target ranges based upon Matrix Consulting Group's experience conducting recreation fee studies. Typically, classes and programs have a 30% to 50% cost recovery. The Division’s youth and adult programming are on the higher end of the cost recovery range. At 130%, the parks, fields, and court rentals generate additional revenues above cost. This excess in cost recovery is typical for rentals partially due to their optional nature, as the community can choose to use the City’s amenities, and in part due to the individual benefit of rentals. SUMMARY Overall, the Community Services Department is within the typical cost recovery range, and while classes / programs are within range, rentals and specialized services are higher in cost recovery. The department should utilize the target cost recovery ranges as a guideline to setting rates. Within these larger program categories, there can be different cost recovery targets for sub-programs or subsections. For example, within Recreation, there would be different cost recovery goals for adult vs. youth services. 14 Cost centers excluded include the following: 80080311 & 80080312.

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The City provides comprehensive in-house ambulance and emergency medical services, which includes staffing its fire engines with Firefighter / Paramedics for Advanced Life Safety (ALS) and Basic Life Safety (BLS) calls, as well as several ambulances. The following subsections discuss the current EMS related cost per transport, the full cost calculated for the different types of services (i.e., ALS, BLS, etc.), mileage charge, oxygen use, as well as the annual revenue impacts. EMS SPECIFIC LEGAL FRAMEWORK EMS fees have traditionally been considered under the umbrella of user fees or fees for service. As such, these fees are subject to the same legal rules and regulations as other user fees, i.e., the fee cannot exceed the cost to provide the service. However, EMS fees are unique from other fees for service as the fee payer dictates the rate they will pay, which is often less than the current fee charged for the service. For example, traditionally, if the fee for a water heater permit is $150, any individual who pulls a water heater permit must pay $150. However, in the case of EMS fees, if the fee for transport is $150, depending upon your insurance provider, the City may get paid $0, $50, $100, or the full $150. Therefore, the two types of fees are not equal. While the City has historically set its EMS fees at full cost, it has run into the traditional conundrum of not being able to achieve full cost recovery, as the fee charged is not the fee rate paid. The focus of this analysis is to provide the City with defensible, full cost fees. Depending on the City’s payor mix, the City will not be able to recover the full cost of EMS services, however, it will be in full compliance with the law. EMS COST PER TRANSPORT CALCULATION To calculate the full cost associated with EMS fees, the project team evaluated the City’s direct and indirect costs associated with these activities. The City has the following types of expenses that are EMS-related: • EMS Program: this program houses the direct costs associated with EMS staff, supplies, and contract services, such as billing. • Indirect Costs: These costs reflect departmental overhead associated with the Fire Chief and other support personnel, as well as Citywide overhead associated with Finance, Human Resources, etc. • EMS Staffed Firefighters: The City has recently increased its staffing associated with EMS services to include additional firefighter paramedics to increase the number of transports they can provide. The following table shows the total FY25 budgeted EMS costs based on these expenses:

FIRE EMS
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TABLE 16: TOTAL EMS-RELATED COSTS Expense Type FY25 Budget Direct EMS Expenses $5,910,989 Citywide and Departmental Overhead $896,281 EMS Staffed Firefighters $7,214,994 Total EMS Related Expenses $13,602,558 The total Fire EMS related costs are roughly $13.6 million. To determine the total cost per transport the project took the $13.6 million in EMS costs and divided it by the average total number of transports conducted by the Department over the past three fiscal years, as shown in the following table: TABLE 17: TOTAL EMS COST PER TRANSPORT Expense Type FY25 Budget Direct EMS Expenses $3,602,558 Total # of Transports 3,840 Total Cost Per Transport $3,543 Based upon EMS direct and indirect costs of $13.6 million and approximately 3,800 annual transports, the City’s cost per transport is approximately $3,543. ALS AND BLS COST CALCULATION While $3,543 is the overall cost per transport, this is converted into two types of fees – Advanced Life Support (ALS) and Basic Life Support (BLS). The typical methodology for converting eh overall cost per transport to these two service areas is based upon a factor that can be applied to each depending upon the level of effort. This factor is based upon discussions with staff, ensuring that the overall split of services totals the overall revenue to be recovered. The following table shows the calculation of the cost for each service area based on the cost per transport, the effort factor, and the resulting full cost per unit. TABLE 18: COST CALCULATION PER UNIT – ALS AND BLS Category Cost Per Transport Effort Factor Cost Per Unit ALS $3,543 1.1 $3,897 BLS $3,543 0.9 $3,188 As the table indicates, the total cost calculated is $3,897 for an ALS transport and $3,188 for a BLS transport. The following table compares the City’s current fee, to the full cost calculated: TABLE 19: TRANSPORT FEES – COST PER UNIT COMPARISON Category Current Fee Full Cost Difference ALS Transport Base Rate $2,966 $3,897 ($931) BLS Transport Base Rate $2,556 $3,188 ($632) The City is under-recovering for both its transportation categories, with the ALS subsidy at $931 and the BLS subsidy at $632.

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MILEAGE CALCULATION Along with the ability to bill for transportation and treatment-related activities, the City can also bill for the mileage that is incurred from the transportation scene to the hospital. The mileage charge is typically meant to account for maintenance, fuel, and replacement costs. In FY25 the EMS program budgeted $419,706 for vehicle equipment maintenance, fuel, and replacement costs. To determine the cost per mile, the project team divided the $419,700 by the average number of miles billed for transport-related activities. The following table shows the resulting cost per mile: TABLE 20: COST PER MILE CALCULATION Category Amount Total EMS Mileage Cost $419,706 Avg Mileage Billed 13,268 Total Cost Per Mile $31.63 The total cost per mile was calculated at $31.63. The following table compares the current fee per mile to the full cost per mile: TABLE 21: MILEAGE– COST PER UNIT COMPARISON Category Current Fee Full Cost Difference Mileage $35 $32 $3 Based on the cost calculated, the City is over-recovering by approximately $3 per mile. It is important to note that even though the City shows an over-recovery, due to its payor mix it does not actually receive $35 per mile. The actual reimbursement amount depends on the payor mix of the agency. OXYGEN CALCULATION As with the mileage charge, the City also bills for oxygen usage. The cost for oxygen usage was calculated based on the rental and re-filling costs for oxygen and the number of tanks. The following table shows the cost per tank calculation: TABLE 22: COST PER TANK CALCULATION Category Amount Oxygen Cost $7,075 Total # of Oxygen Tanks 15 Cost Per Tank $472 The cost per tank through this study was calculated at $472. However, each trip or use of oxygen does not take up a full tank. The project team calculated the number of trips it takes to utilize a full oxygen tank. This trip calculation was done based on the average number of transports, the average number of oxygen uses, and the percentage of time the tank is refilled / checked. The following table shows the number of trips calculated per oxygen tank utilization:

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TABLE 23: # OF TRIPS PER OXYGEN TANK CALCULATION Category Amount Total # of Transports 3,840 Total # of Oxygen Uses 1,152 # of Trips per Oxygen Tank 3.33 % of Time Tank is Refilled / Check 50% # of Trips per Oxygen Tank – Utilized 1.67 Even though, on average, it takes a little over three trips before the oxygen tank would need to be refilled, based upon discussion with staff, the City does not wait until the oxygen tank is fully depleted before refilling it. As such, the tank is refilled or checked about every one and a half trips. The following table takes the total cost per tank and then divides it by the number of trips per oxygen tank utilization to determine the cost per oxygen use: TABLE 24: COST PER OXYGEN USE Category Amount Cost Per Tank $472 # of Trips per Oxygen Tank – Utilized 1.67 Cost Per Oxygen Use $283 The total cost per oxygen use calculated is $283. The following table compares the City’s current fee to the total cost calculated and the resulting difference: TABLE 25: OXYGEN – COST PER UNIT COMPARISON Category Current Fee Full Cost Difference Oxygen Use $179 $283 ($104) The City is under-recovering by approximately $100 per oxygen use, recovering approximately 63% of its costs. COMPLIANCE FEES The City currently assess an hourly fee for engine company inspections. This fee is only assessed when the engine company is required to perform a second reinspection. The following table compares the City’s current fee to the total cost calculated and the resulting difference: TABLE 26: EMS – COMPLIANCE FEES Category Current Fee Full Cost Difference Engine Company Second Reinspection $279 $994 ($715) The City’s current fee is under-recovering by approximately $700. While the large difference can be attributed to increased costs associated with Engine services, the more likely reason for the large disparity is due to the current fee not being set at full cost recovery.

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FIRST RESPONDER FEE While discussing current EMS services with City staff, it was noted that the current ALS and BLS fees only account for EMS specific costs, but do not cover the costs associated with engine incident responses. Therefore, it was proposed that a First Responder Fee be established to provide the City with a mechanism to recover these costs. Based on a thirty (30) minute call out, the full cost calculated for the First Responder Fee would be $497. ANNUAL REVENUE IMPACTS As noted at the beginning of this chapter, EMS services differ from other fee-related services, as the user is billed after services are provided, typically with bills going through insurance companies first. Depending on the user’s insurance, the City may only receive a fraction of the amount billed. Therefore, based on the make-up of the users of EMS services, the revenue the City receives is dramatically lower than what is billed. The following subsections outline the City’s current payer mix and annual cost recovery. PAYOR MIX Those who use EMS transport services typically fall into one of five (5) categories: Medicaid, Medicare, Private Insurance, Worker’s Comp, or Other. The following table outlines the payor mix for EMS services in as well as the average recovery for Fiscal Year 2024. TABLE 27: EMS SERVICE PAYOR MIX Payor Type FY24 % of Payors Average Recovery Medicaid 15% 43% Medicare 53% 26% Private Insurance 26% 86% Worker’s Comp 1% 34% Other 5% 5% For Medicaid and Medicare services, the insurance provider sets a standard amount it will reimburse for various EMS services – regardless of the fees billed by the service provider. The amount the City receives from Private Insurance, Worker’s Comp, and Other users depends on the medical plan of the individual. As shown in the table above, the majority of the City’s users are on Medicare which has an average recovery rate of 26%, while the highest recovery rate (86%) belongs to those with Private Insurance, who comprise roughly 25% of the total users. ANNUAL REVENUE RECOVERY – CURRENT FEE There are two types of annual revenue recoveries that can be calculated for EMS services: 1. Potential Revenue vs. Total Cost: this compares assumed revenue generation based on 100% collection of fees billed compared to the full cost of providing the service.

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2. Annual Revenue Collected vs. Annual Cost: this shows the amount collected compared to the annual cost associated with those activities. Based upon the current fee charged by the Fire Department for EMS-related activities and the projected annual cost, the project team calculated that the department would have had a $5.2 million deficit or recovered approximately 69% of its costs. The following table shows by fee category the annual amount billed, the annual cost, and the surplus / deficit: TABLE 28: EMS ANNUAL COST RECOVERY – BILLED VS TOTAL COST Category Potential Revenue Total Cost Difference Transport Mileage $464,380 $419,698 $44,682 BLS $3,023,748 $3,771,849 ($748,101) ALS $7,880,662 $10,354,075 ($2,473,413) First Responder Fee $1,908,170 ($1,908,170) Oxygen $206,208 $326,016 ($119,808) Total $11,574,998 $16,779,808 ($5,204,810) Of the $5.2 million, the biggest impact relates to ALS related transports, while nearly $2 million is related to First Responder services which aren’t currently being assessed. However, as noted above, what the City bills is not what the City recovers. Therefore, the following table compares the revenue collected by the City to the City’s total cost of providing services, and the associated difference: TABLE 29: EMS ANNUAL COST RECOVERY – RECOVERED VS TOTAL COST Category Recovered Revenue Total Cost Difference Transport Mileage $207,757 $419,698 ($211,941) BLS $1,192,728 $3,771,849 ($2,579,121) ALS $3,283,567 $10,354,075 ($7,070,508) First Responder Fee $0 $1,908,170 ($1,908,170) Oxygen $53,614 $326,016 ($272,402) Total $4,737,667 $16,779,808 ($12,042,141) While the City billed for nearly $11.6 million in transport related services, it only received roughly $4.7 million in offsetting revenue. When comparing the $4.7 million to their total annual costs, their deficit is approximately $12 million, resulting in a cost recovery rate of only 28%. ANNUAL REVENUE RECOVERY – TOTAL COST Should the City increase their fees to reflect the full cost of providing EMS services, including implementation of the First Responder fee, they would see an increase in annual revenue. The following compares current collected revenue to projected revenue collections based on a full cost fee and estimates a potential revenue increase.

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TABLE 30: EMS ANNUAL COST RECOVERY – POTENTIAL REVENUE Category Recovered Revenue Revenue at Full Cost Fee Potential Revenue Increase Transport Mileage $207,757 $191,897 ($15,860) BLS $1,192,728 $1,351,895 $159,166 ALS $3,283,567 $3,813,738 $530,171 First Responder Fee $0 $374,400 $374,400 Oxygen $53,614 $84,764 $31,150 TOTAL $4,737,667 $5,816,694 $1,079,027 Should the City adopt EMS transport fees at the full cost shown in this report, based on the average annual workload it could generate approximately $5.8 million in revenue, which would represent an increase of roughly $1 million. Projected revenue associated with the First Responder Fee assumes 75% recovery from only Private Payors. However, given that the First Responder fee is new, and the ability for the City to recover these billed services is unknown, we would conservatively project the City’s potential revenue increase at only $700,000.

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The Palo Alto Police Department is responsible for providing emergency and non-emergency public safety services to the citizens of Palo Alto. As part of this duty, the department administers fees for background checks, vehicle impoundments, and variety of permits for specific businesses, such as taxicabs and firearms dealers. Officers also assist with Special Events and administer related fees accordingly. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Police Department. FEE SCHEDULE MODIFICATIONS In discussions with Police Department staff, the following modifications to the current fee schedule were proposed: • Eliminated Fees: The following fees were eliminated as they represent services no longer offered by the Police Department: – Adult Entertainment – Closing-out Sale – Adult Entertainment – Closing-out Sale Renewal (Two Maximum) – Background Check – New – Department of Justice Fingerprint and Rolling Fee – FBI Fingerprint Fee – Noise Exception Permit – Parenting Project Materials – Parenting Project Program – Valet Parking – Sign & Curb Markings • New Fees: Police Department staff proposed the addition of the following fees to the fee schedule, as they represent either services already offered and not codified or new services the City would like to offer: – Civil Subpoena Appearance Fee – Towed Stored Vehicle Fee • Expanded Fees: Staff proposed expanding the ‘Taxicab – Driver’ fee to include two categories (‘New’ and ‘Renewal’) to better account for a difference in processing time. • Modified Fees: The ‘Subpoena Fee’ was clarified to read ‘Subpoena Fee for Documents,’ and the ‘Special Event / Film Permit’ fee was modified to read ‘Film / Photography Permit.’ The modifications noted above ensure that the proposed fee schedule better reflets the services being provided by Police Department staff.

POLICE
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DETAILED RESULTS The Police Department collects fees for high-risk business regulation, vehicle impoundments, special events, and miscellaneous administrative tasks. The total cost calculated for each service includes direct staff costs and Departmental, Divisional, and Citywide overhead. The following table details the fee name, current fee, total cost, and difference associated with each service offered. TABLE 31: TOTAL COST PER UNIT RESULTS – POLICE Fee Name Unit Current Fee Total Cost Difference Background Check OPM/DOD Background Check Per Application $5 $112 ($107) Impoundment Fees - Vehicle Vehicle Impoundment Fee Each $158 $162 ($4) Vehicle Repossession Receipt15 Each $15 $15 $0 Towed Stored Vehicle Fee Each New $162 Personnel Rates Emergency Response Fee Per Incident Actual Cost Special Fees Clearance Letter Each $35 $131 ($96) Digital Media Reproduction Fee Each $65 $281 ($216) Location Crime Statistics Fee Each $86 $359 ($273) Offsite Document Retrieval Per Item Actual Cost Report Copy Fee16 Each $15 $15 $0 Research Fee Per Hour $160 $245 ($85) Subpoena Fee For Documents17 Per Hour $24 $24 $0 Civil Subpoena Appearance Fee18 Per Person Per Day $275 $275 $0 Firearms Dealer Firearms Dealer Master Permit - New Per Year $3,564 $3,637 ($73) Firearms Dealer Master Permit - Renewal Per Year $644 $970 ($326) Miscellaneous Helicopter Landing Fee Per Occurrence $79 $81 ($2) One Day Liquor Permit Fee: For Profit Rate Per Permit $65 $76 ($11) Non-Profit Rate Per Permit $49 $76 ($27) Secondhand Dealers DOJ Per Application $300 $300 $0 New Per Application $481 $242 $239 Renewal Per Application $120 $121 ($1) Taxicab Master License: New Per Year $3,589 $7,274 ($3,685) Renewal Per Year $1,609 $2,425 ($816) Driver: New Per Year $65 $242 ($177) 15 Ca. Gov. Code § 26751 16 EVI § 1563(b)(6) 17 EVI § 1563(b)(1) 18 GOV § 68097.2 (b) Item 2
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Fee Name Unit Current Fee Total Cost Difference Renewal Per Year $65 $81 ($16) Vehicle Inspection for Each Vehicle Per Year $92 $81 $11 Replacement or Transfer Fee Each $80 $40 $40 Valet Parking Permit Application Per Application $863 $970 ($107) Permit Application Renewal (Annual) Per Year $130 $242 ($112) Short-Term Application Fee Per Application $406 $229 $177 Special Events Personnel Rates for events where 100% of the proceeds go to a Profit Organization: Community Services Officer Per Hour $111 $215 ($104) Police Agent Per Hour $245 $272 ($27) Police Officer Per Hour $206 $244 ($38) Police Reserve Per Hour $88 $58 $30 Police Sergeant Per Hour $272 $291 ($19) Personnel Rates for events where 80% of the proceeds go directly to Non-Profit Organizations: Community Services Officer Per Hour $92 $215 ($123) Police Agent Per Hour $212 $272 ($60) Police Officer Per Hour $171 $244 ($73) Police Reserve Per Hour $72 $58 $14 Police Sergeant Per Hour $232 $291 ($59) Personnel Rates for events where 80% or more of the proceeds go directly to Non-Profit Organizations or events declared as co-sponsored by the City of Palo Alto: Community Services Officer Per Hour $87 $215 ($128) Police Agent Per Hour $185 $272 ($87) Police Officer Per Hour $160 $244 ($84) Police Reserve Per Hour $65 $58 $7 Police Sergeant Per Hour $205 $291 ($86) Special Fees: Special Event Permit 201 - 400 Attendees Per Permit $334 $582 ($248) 401 – 600 Attendees Per Permit $359 $2,036 ($1,677) Each Add’l 200 Attendees Each $53 $291 ($238) Film / Photography Permit: Large Commercial Filming Per Permit $306 $582 ($276) Low-Impact Filming Permit (Cast & Crew 35 or less) Per Permit $306 $291 $15 Student Filming / Photography Per Permit $306 $291 $15 Photography Permit Per Permit $306 $145 $161 Temporary Street Closure Each Refer to PW Fee Schedule The Police Department’s fees show a mix of under- and over-recoveries but generally under-recover. The largest undercharge is for a New Taxicab Master License at about $3,700. The smallest deficit is for the ‘Secondhand Dealers – Renewal’ fee at just $1. Of the fees that show over-recoveries, the largest overcharge is for a ‘Short-Term Application Fee’ for Valet Parking at around $175, and the smallest is the ‘Vehicle Inspection for Each Vehicle’ fee for taxicab drivers at approximately $10.

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ANNUAL RESULTS Because of the limited workload information available for Police, no annual results were calculated.

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The Animal Control Division of the Palo Alto Police Department oversees enforcement of animal-related ordinances, responds to issues involving animals in the City, and provides permits and licensing for pets and livestock and related events. The fees examined in this study related to animal permits, disposal, animal impoundments, pet licenses, and pet quarantines. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Animal Control Division. FEE SCHEDULE MODIFICATIONS In discussions with Animal Control staff, the following modifications to the current fee schedule were proposed: • Eliminated Fees: The following fees were eliminated as they represent services no longer offered by Animal Control: – Disposal – Dogs, Cats, Rabbits (up to 20lbs) – Disposal – Dogs (up to 75lbs) – Disposal – Dogs (76lbs and over) – Disposal – Each Additional Animal – Disposal – Large Animals (up to 150lbs) – Disposal – Small Animals and Birds – Riding Academy – Special Impoundment Fee – Dog • New Fees: Police Department staff proposed the addition of the following fees to the fee schedule, as they represent either services already offered and not codified or new services the City would like to offer: – Pet Licenses – Senion Citizen / Veteran – Rabies Exemption – Service Dog Tag • Modified Fees: The names of the following fees were modified to provide greater clarity: – Animal Permits – Dangerous Animal Permit – Animal Permits – Livestock / Apiary – Animal Permits – Pet Show – Animal Permits – Traveling Menagerie or Petting Zoo POLICE – ANIMAL CONTROL
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– Disposal – Service Fee – Pet Licenses – Spayed or Neutered (Altered) – Pet Licenses – Unaltered The modifications noted above ensure that the proposed fee schedule better reflets the services being provided by Animal Control. DETAILED RESULTS Animal Control collects fees for animal-related permitting, impoundment, pet licenses, and miscellaneous other services. The total cost calculated for each service includes direct staff costs, and Departmental, Divisional, and Citywide overhead. The following table details the fee name, current fee, total cost, and difference associated with each service offered. TABLE 32: TOTAL COST PER UNIT RESULTS – ANIMAL CONTROL Fee Name Unit Current Fee Total Cost Difference Animal Permits Boarding Per Permit $219 $384 ($165) Breeding Permit - Cat, Dog, or Bird Per Permit $133 $384 ($251) Kennel, Birds, or Animals Per Permit $219 $384 ($165) Livery Stable, Boarding Stable Per Permit $219 $384 ($165) Livestock / Apiary Per Permit $80 $220 ($140) Pet Shop/Groomer Per Permit $219 $384 ($165) Pet Show Per Permit $80 $327 ($247) Pony Ride, Pony Ring Per Permit $219 $327 ($108) Traveling Menagerie or Petting Zoo Per Permit $219 $327 ($108) Dangerous Animal Permit Per Permit $432 $384 $48 Disposal Service Fee Each $60 $107 ($47) Impoundment Fees Impoundment Fees - Cat: First Offense Per Occurrence $36 $213 ($177) Second Offense Per Occurrence $54 $213 ($159) Third and Subsequent Offenses Per Occurrence $74 $213 ($139) Impoundment Fees - Dog - Licensed: First Offense Per Occurrence $36 $213 ($177) Second Offense Per Occurrence $54 $213 ($159) Third Offense Per Occurrence $72 $213 ($141) Fourth Offense Per Occurrence $135 $213 ($78) Fifth to Tenth Offense Per Occurrence $181 $213 ($32) Eleventh and Subsequent Offenses Per Occurrence $203 $213 ($10) Impoundment Fees - Dog - Unlicensed: First Offense Per Occurrence $61 $213 ($152) Second Offense Per Occurrence $93 $213 ($120) Third Offense Per Occurrence $115 $213 ($98) Fourth Offense Per Occurrence $154 $213 ($59) Fifth to Tenth Offense Per Occurrence $209 $213 ($4) Item 2
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Fee Name Unit Current Fee Total Cost Difference Eleventh and Subsequent Offenses Per Occurrence $246 $213 $33 Impoundment Fees - General: Other Animals (Small) - Bird, Rabbit, Reptile, etc. Per Occurrence $31 $213 ($182) Other Animals (Large) - Horse, Cow, Pig, Goat, etc. Per Occurrence $123 $213 ($90) State Mandated Fees19 First Offense Per Occurrence $35 $35 $0 Second Offense Per Occurrence $50 $50 $0 Third and Subsequent Offenses Per Occurrence $100 $100 $0 Pet Licenses 12 Months Unaltered Per Dog $45 $52 ($7) Spayed or Neutered (Altered) Per Dog $22 $52 ($30) Senior Citizen / Veteran Per Dog New $52 24 Months Unaltered Per Dog $67 $71 ($4) Spayed or Neutered (Altered) Per Dog $33 $71 ($38) Senior Citizen / Veteran Per Dog New $71 36 Months Unaltered Per Dog $90 $90 $0 Spayed or Neutered (Altered) Per Dog $45 $90 ($45) Senior Citizen / Veteran Per Dog New $90 Service Dog Tag Per Dog New $52 Rabies Exemption Per Dog New $38 Replacement License Tags (Dogs) Each $5 $33 ($28) Special Fees Animal Control Officer Per Hour $91 $213 ($122) Quarantine Home Inspection Fee Each $46 $427 ($381) Animal Control’s fees generally under-recover the associated costs. The fee that shows the largest under-recovery is the ‘Quarantine Home Inspection Fee’ at around $400, followed by the fee for a ‘Breeding Permit – Cat, Dog, or Bird’ ($250). The fee with the smallest undercharge is the ‘Impoundment Fees – Dog – Unlicensed – Fifth to Tenth Offense’ at about $5. Only two fees show an over-recovery (‘Dangerous Animal Permit’ and ‘Impoundment Fees – Dog – Unlicensed – Eleventh and Subsequent Offenses’), both of which can be considered penalties. ANNUAL RESULTS Because of the limited workload information available for Animal Control, no annual results were calculated. 19 CA Food & Agri Code § 30804.7 Item 2
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The Public Works department aims to ensure the City’s infrastructure is well-maintained, promote the protection of the City’s urban forest, and protect quality of life through the prevention of pollution, and promotion of environmental policies and regulations. Though the Department provides a variety of services that span multiple funds, the focus of this analysis was on Operations, Storm Drain, and Wastewater services. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Animal Control Division. FEE SCHEDULE MODIFICATIONS In discussions with Public Works staff, some minor modifications to each division’s fee structures were proposed. These modifications are outlined in the following points: • Operations: Staff determined that the addition of two fees: Disposal and Use of Equipment would help better outline the services provided. Conversely, Overtime & Holiday rates associated with Electric Vehicle Charger Connections and Charging, as well as Newsrack Impoundment were removed as those services are no longer needed or provided. • Storm Drain: Staff determined that the Storm Drain Inspection Fee should be renamed to better reflect the service being provided to: Stormwater Treatment Feature Operations and Maintenance Inspection. Additionally, the Base fee was lowered from four (4) hours to three (3) hours. • Wastewater Treatment: Staff determined that the Exceptional Waste – (High Volume) and Exceptional Waste (Low Volume) categories under Industrial Waste Discharge should be consolidated into a singular fee. Similarly, the Full (Categorical) and Full (Non-Categorical) were also consolidated into a singular fee, along with the Septic Tank & Portable Toilet Waste Disposal fees which were consolidated into a single per gallon Discharge fee The modifications outlined above strengthen the schedules associated with each division, and ensure that the services provided are clearly identified, and accurately reflect the time associated with each service. DETAILED RESULTS The Public Works divisions included in this analysis collect a variety of fees for services. The total cost calculated for each service includes direct staff costs and Departmental, Divisional, and Citywide overhead. The following subsections outline the detailed per unit results for Operations, Storm Drain, and Wastewater. OPERATIONS Operations staff provide services relating to Maintenance and Repair, Map / Plan Review, and Tree Removals. The following table details the fee name, current fee, total cost, and difference associated with each service offered.

PUBLIC WORKS
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TABLE 33: TOTAL COST PER UNIT RESULTS – PUBLIC WORKS OPERATIONS Fee Name Unit Current Fee Total Cost Difference Maintenance & Repair Regular Time: Construction & Repair Per Hour $184 $185 ($1) Electric Vehicle Charger Connection Per Connection $0.00 to $2.00 Electric Vehicle Charger Connection Overstay Per Hour $0.00 to $5.00 Electric Vehicle Charging Per Kilowatt Hour $0.24 Newsrack Impoundment Fee First Day Base $208 Each Subsequent Day Each Subsequent Day $3 Supervision Per Hour $187 $228 ($41) Sweeping Services Per Hour $151 $179 ($28) Traffic Control/Graffiti Services Per Hour $138 $163 ($25) Traffic Property Damage Per Hour $138 $163 ($25) Tree Services Per Hour $161 $172 ($11) Overtime & Holiday: Construction & Repair Per Hour $272 $222 $50 Supervision Per Hour $282 $276 $6 Sweeping Services Per Hour $227 $213 $14 Traffic Control/Graffiti Services Per Hour $208 $194 $14 Traffic Property Damage Per Hour $208 $194 $14 Tree Services Per Hour $226 $208 $18 Disposal Each Actual Cost Use of Equipment Each Actual Cost Map/Plan Review Fees Home Improvement Exception - Trees Per Application $487 $575 ($88) IR Review - Trees Per Application $759 $575 $184 Tree Removal Protected Tree Removal Per Removal $499 $460 $39 Record Management Fee Per File $32 $174 ($142) Tree Removal Per Inch of Damage Plus Planting Installation $153 The majority of the services provided by Operations are charged hourly, with some of those services showing under-recoveries, and others show over-recoveries. Fees associated with Electric Vehicle Charger Connections and charging were not evaluated through this analysis as they are not a time-based service. Newsrack impoundments and Tree Removals also weren’t reviewed as these are penalties. Overall, Operations fees are generally recovering their costs on a per unit basis, and inline with typical cost recovery levels of between 80% and 100%. STORM DRAIN Storm Drain staff provide services relating to flood variance, flood zone determination, and temporary elevation benchmarks. The following table details the fee name, current fee, total cost, and difference associated with each service offered.

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TABLE 34: TOTAL COST PER UNIT RESULTS – PUBLIC WORKS STORM DRAIN Fee Name Unit Current Fee Total Cost Difference Flood Variance Fee Each City Cost plus 15% Flood Zone Determination Letter Per Letter $147 $419 ($272) Stormwater Treatment Feature Operations and Maintenance Inspection: Up to 3 Hours Base $59920 $540 $60 Per Hour Thereafter Per Hour Thereafter $123 $187 ($64) Temporary Elevation Benchmarks Per Benchmark $500 $505 ($5) The Flood Zone Determination Letter shows a subsidy of approximately $272, while the the base rate for a Stormwater Treatment Feature Operations and Maintenance Inspection shows an overage of $60. With the exception of the Flood Zone Determination Letter, the fees charged for Storm Drain services are within the typical cost recovery range of 80% - 100%. WASTEWATER TREATMENT Wastewater Treatment staff provide services relating to Industrial Waste Discharge, and Recycled Water. The following table details the fee name, current fee, total cost, and difference associated with each service offered. TABLE 35: TOTAL COST PER UNIT RESULTS – PUBLIC WORKS WASTEWATER Fee Name Unit Current Fee Total Cost Difference Industrial Waste Discharge Fees: Automotive Per Year $699 $1,523 ($824) Basic Per Year $4,120 $5,735 ($1,615) Best Management Practices (BMP) Per Year $1,541 $2,856 ($1,315) Exceptional Waste Per Permit Modified $3,473 N/A Full Per Year Modified $6,898 N/A Groundwater Per Year $1,576 $1,614 ($38) Industrial Waste Discharge Fees - Liquid Waste Disposal Fee: Septic Tank & Portable Toilet Waste Disposal Permit Processing Each $105 $542 ($437) Discharge Fee Per Gallon $0.1021 $0.77 ($0.67) Recycled Water Fees: Recycled Water Permit Processing Per Permit $52 $452 ($400) All fees charged by Wastewater staff show an under-recovery, the largest being for Basic Industrial Waste Discharge at $1,615. Overall, fees associated with Wastewater services are below the typical cost recovery level of 80% - 100%. 20 The current fee has been modified to provide a true three-hour comparison. 21 The current fee has been modified to provide a true per gallon comparison.

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ANNUAL RESULTS Workload statistics at a level sufficient to evaluate annual revenue impacts were not available, therefore no annual results were calculated.

Real Estate and Property Management is a division within the Administrative Services Department. This Division is responsible for the management of City-owned properties, including the acquisition, leasing, and sale of property. The fees examined within this study relate to Conveyance and Easement Vacation services. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Real Estate and Property Management division. FEE SCHEDULE MODIFICATIONS In discussions with Real Estate and Property Management staff it was determined that no modifications to the current fee structure were needed. DETAILED RESULTS The Real Estate and Property Management division collects fees associated with easement vacations, property transfer tax exemptions, and other conveyances. The following table details the fee name, current fee, total cost, and difference associated with each service offered. TABLE 36: TOTAL COST PER UNIT RESULTS – REAL ESTATE AND PROPERTY MANAGEMENT Fee Name Unit Current Fee Total Cost Difference Conveyance Commercial/Non-Residential/Residential - Long Term (More than 12 months) Each $1,750 $4,613 ($2,863) Consent to Assignment, Amendment, Extension or Hypothecation of a lease or sublease where the City is lessor Each $780 $1,648 ($868) Easement Document Preparation and Processing (Commercial & Residential) Each $1,700 $1,648 $52 License/Grant Deed Preparation Each $1,930 $4,613 ($2,683) Property Transfer Tax Exemption Fee Each $245 $577 ($332) Public Notice Mailing/Posting/Advertising (Commercial & Residential) Deposit $116 $116 $0 Telecommunication Application Processing Fee Each $3,426 Easement Vacation General Each $4,892 Summary Each $2,083 $3,295 ($1,212) All but one of the fees charged by Real Estate and Property Management staff show an under-recovery. The largest subsidy relates to ‘Commerial / Non-Residential / Residential – Long Term (More than 12 months) Conveyance’ at $2,863, while the least subsidized fee is for a ‘Property Transfer Tax Examption

REAL ESTATE AND PROPERTY MANAGEMENT
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Conveyance’ at $13. ‘Easement Document Preparation and Processing (Commercial & Residential) Conveyance’ shows an over-collection of $52, and should be reduce in order to comply with current fee regulations. It should be noted that time estiamtes were not provided by staff for services relating to ‘Telecommunication Application Processing Conveyance’ and ‘General Easement Vacation’, therefore, not total cost was calculated. ANNUAL RESULTS Given the minimal workload associated with the real estate and property management, no annual results were calculated.

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Revenue Collection is a division within the Administrative Services Department. This Division is responsible for the collection of general city revenues associated with utility billing, parking permits, TOT payments, and other miscellaneous receivables. The fees examined within this study relate to Documents and Photocopies, Parking, and Miscellaneous services. The following subsections discuss fee schedule modifications and detailed per unit results for the fee-related services provided by the Revenue Collection division. FEE SCHEDULE MODIFICATIONS In discussions with Revenue Collection staff, it was determined that Documents & Photocopies fees relating to ‘Annual Comprehensive Financial Report (ACFR)’, ‘Budget Book’, and ‘Municipal Fee Schedule’ would be eliminated. These fees are being removed as the associated materials can now be found on the City’s website, no longer requiring staff time for processing. DETAILED RESULTS The Revenue Collection division collects fees associated with certified mailings, duplicate receipts, returned checks, and parking permit investigations. The following table details the fee name, current fee, total cost, and difference associated with each service offered. TABLE 37: TOTAL COST PER UNIT RESULTS – REVENUE COLLECTION Fee Name Unit Current Fee Total Cost Difference Documents & Photocopies Mailing (Certified) Each $4 $23 ($18) Miscellaneous Duplicate Receipt Each $9 $36 ($27) Returned Payment Charge (California Civil Code Section 1719)22 Each $25 $25 Parking Permit Investigation (non-refundable) Each $23 $36 ($13) Recreational Vehicle/Oversized Vehicle Per Application $22 $90 ($68) Of the services reviewed through this study all under-recover for the full cost of providing the service. The largest subsidy relates to ‘Recreation Vehicle / Oversized Vehicle’ at $68, while the smallest subsidy relates to ‘Permit Investigation (non-refundable)’ at $13. ANNUAL RESULTS Given the minimal workload associated with the reviewed services, no annual results were calculated. 22 The total cost associated has been set according to CIV § 1719(a).

REVENUE COLLECTION
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The following sections provide guidance regarding how and where to increase fees, determine annual update factors, and develop cost recovery policies and procedures. 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 study results and adjust fees per Departmental and City philosophies and policies. The following dot points 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 straightforward, 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. 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, these minimal increases can provide necessary revenue to counterbalance fees that cannot 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.

COST RECOVERY CONSIDERATIONS
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PHASED INCREASES Depending on current cost recovery levels, some current fees may need to be increased significantly 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 its 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, to comply. Assuming this 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 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 above, the City could increase the fee by $150 per year 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 after which a comprehensive fee assessment should be completed. ANNUAL ADJUSTMENTS Conducting a comprehensive analysis of fee-related services and costs annually would be quite cumbersome and costly. The general recommendation is that a comprehensive fee analysis should be conducted every three to five years. This allows jurisdictions to ensure they account for organizational changes, such as staffing levels and merit increases, and process efficiencies, code or rule changes, or technology improvements. Currently, Palo Alto updates their fees annually based on internal cost factors. Developing annual update mechanisms allows jurisdictions to maintain current levels of cost recovery, while accounting for increases in staffing or expenditures related to permit services. The two most common types of update mechanisms are Consumer Price Index (CPI) and Cost of Living Adjustment (COLA) factors. The following points provide further detail on each of these mechanisms: • COLA / Personnel Cost Factor: Jurisdictions often provide their staff with annual salary adjustments to account for increases in local cost of living. These increases are not tied to merit or seniority but rather meant to offset rising costs associated with housing, gas, and other livability factors. Sometimes these factors vary depending on the bargaining group of a specific employee. Generally, these factors are around two or three percent annually. • CPI / ECI Factor: A common method of increasing fees or cost is to look at regional cost indicators, such as the Consumer Price Index or Employment Cost Index. These factors are calculated by the Bureau of Labor Statistics, are put out at various intervals within a year, and are specific to states and regions.

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PALO ALTO MUNICIPAL FEE STUDY REPORT
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The City of Palo Alto should review its current options internally (COLA) as well as externally (CPI / ECI) to determine which option better reflects the goals of the Departments and the City. If choosing a CPI / ECI factor, the City should outline which CPI / ECI should be used, including specific region and adoption date. If choosing an internal factor, the City should be sure to specify which factor if multiple exist. POLICIES AND PROCEDURES This study has identified areas where the City is under-collecting the costs associated with providing services. This known funding gap is therefore being subsidized by other City revenue sources. Cost recovery policies and procedures 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. The following subsections outline typical cost recovery levels and discuss the benefits of reviewing target cost recovery goals and procedures to achieve increased cost recovery. TYPICAL COST RECOVERY The Matrix Consulting Group has extensive experience in analyzing local government operations across the United States and has calculated typical cost recovery ranges. The following table outlines typical cost recovery ranges by major service area. TABLE 38: TYPICAL COST RECOVERY RANGES BY MAJOR SERVICE AREA Service Areas Typical Cost Recovery Ranges Administration 40-70% Public Works 80-100% Parks & Recreation 20-50% Information presented in the table above is based on the Matrix Consulting Group’s experience in analyzing local governments’ operations across the United States and within California and reflects typical cost recovery ranges observed by local adopting authorities. COST RECOVERY POLICIES AND PROCEDURES The City currently has formal cost recovery policies that outline recovery goals based on services and community impacts. The City should review the results of this study in conjunction with adopted policies regarding cost recovery and make adjusts to meet current fiscal needs.

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- ZĞĂƉƉƌŽƉƌŝĂƟŽŶƐĂŶĚdĞĐŚŶŝĐĂůĚũƵƐƚŵĞŶƚƐƚŽĂƉŝƚĂůWƌŽũĞĐƚƐ ƐĂŶĂŶŶƵĂůĂĚŵŝŶŝƐƚƌĂƟǀĞďƵĚŐĞƚƉƌŽĐĞƐƐ͕^ƚĂīŝƐĐƵƌƌĞŶƚůLJǁŽƌŬŝŶŐŽŶĐĂƉŝƚĂů ƌĞĂƉƉƌŽƉƌŝĂƟŽŶƐƚŽƌĞĐŽŵŵĞŶĚƐŚŝŌŝŶŐƵŶƐƉĞŶƚĨƵŶĚƐŝŶĐĂƉŝƚĂůƉƌŽũĞĐƚƐĨƌŽŵ&zϮϬϮ5 ƚŽ&z ϮϬϮ6 ŝŶŽƌĚĞƌƚŽĂĚǀĂŶĐĞƚŚĞƌĞƐƉĞĐƟǀĞƉƌŽũĞĐƚƐ͘dŚĞƐĞƌĞĐŽŵŵĞŶĚĞĚƌĞĂƉƉƌŽƉƌŝĂƟŽŶƐǁŝůůďĞ ŝŶĐůƵĚĞĚĂƐƌĞĐŽŵŵĞŶĚĞĚĂĚũƵƐƚŵĞŶƚƐƚŽƚŚĞ&zϮϬϮ6 ĂƉŝƚĂůƵĚŐĞƚĂƐƉĂƌƚŽĨƚŚĞŽƵŶĐŝů ĚŽƉƟŽŶƐƚĂīƌĞƉŽƌƚŽŶ:ƵŶĞϭ6͘/ŶĂĚĚŝƟŽŶƚŽƚŚĞƌĞĂƉƉƌŽƉƌŝĂƟŽŶƐ͕ƐĞǀĞƌĂůƚĞĐŚŶŝĐĂů ĂĚũƵƐƚŵĞŶƚƐŵĂLJďĞŶĞĞĚĞĚƚŽƐŽŵĞĐĂƉŝƚĂůƉƌŽũĞĐƚƐďĂƐĞĚŽŶĂĐƟŽŶƐ ƚŚĂƚŚĂƉƉĞŶĂƚƚŚĞĞŶĚŽĨ &zϮϬϮ5͘dŚĞƐĞƚĞĐŚŶŝĐĂůĂĚũƵƐƚŵĞŶƚƐ͕ŝĨĂŶLJ͕ǁŝůůĂůƐŽďĞŝŶĐůƵĚĞĚĂƐƌĞĐŽŵŵĞŶĚĞĚĂĚũƵƐƚŵĞŶƚƐ ƚŽƚŚĞ&zϮϬϮ6 ĂƉŝƚĂůƵĚŐĞƚĂƐƉĂƌƚŽĨƚŚĞŽƵŶĐŝůĚŽƉƟŽŶƐƚĂīƌĞƉŽƌƚŽŶ:ƵŶĞϭ6.

DƵŶŝĐŝƉĂů&ĞĞĚũƵƐƚŵĞŶƚƐ
- KŶƉƌŝůϮϵƚŚ ŽŵŵŝƩĞĞƌĞǀŝĞǁĞĚĂŶĚĂƉƉƌŽǀĞĚŵƵŶŝĐŝƉĂůĨĞĞƵƉĚĂƚĞƐďĂƐĞĚƵƉŽŶƚŚĞDĂƚƌŝdž ĐŝƚLJǁŝĚĞĐŽƐƚŽĨƐĞƌǀŝĐĞƐƚƵĚLJǁŝƚŚĚŝƌĞĐƟŽŶĨŽƌƐŽŵĞ^ƚĂīĐůĂƌŝĮĐĂƟŽŶƐ͘ dŚĞƐĞĚĞƉĂƌƚŵĞŶƚĨĞĞƐ ŝŶĐůƵĚĞĚ&ŝƌĞ͕WƵďůŝĐtŽƌŬƐ͕WŽůŝĐĞ͕ŶŝŵĂůŽŶƚƌŽů͕WƵďůŝĐtŽƌŬƐ͕ŝƚLJůĞƌŬĂŶĚĚŵŝŶŝƐƚƌĂƟǀĞ ^ĞƌǀŝĐĞƐĞƉĂƌƚŵĞŶƚ͘ ĂƐĞĚƵƉŽŶƚŚĞ^ƚĂīƵƉĚĂƚĞƐďĞůŽǁ͕ŽŵŵŝƩĞĞŵĂLJĐŽŶƟŶƵĞŝƚ͛Ɛ ƌĞĐŽŵŵĞŶĚĂƟŽŶƚŽƚŚĞŽƵŶĐŝůĨŽƌĂƉƉƌŽǀĂůŽĨĨĞĞƵƉĚĂƚĞƐŽŶ:ƵŶĞϭϲƚŚ. o ŽŵĞƐƟĐƉĂƌƚŶĞƌƐƌĞŐŝƐƚƌĂƟŽŶ– ŚŽǁĚŽĞƐƚŚŝƐĂůŝŐŶǁŝƚŚƚŚĞ^ƚĂƚĞƌĞŐŝƐƚƌĂƟŽŶĂŶĚĨĞĞƐ͘ ƒ ^ƚĂīƌĞĐŽŵŵĞŶĚƐĐŽŶƟŶƵŝŶŐƚŽŽīĞƌƚŽƚŚŝƐƐĞƌǀŝĐĞĂƚƚŚĞŝƚLJĂŶĚĂůŝŐŶŝŶŐǁŝƚŚ ƚŚĞ^ƚĂƚĞ͛ƐĨĞĞŽĨΨϯϯ. tŚŝůĞƚŚĞ^ƚĂƚĞŚĂƐƚǁŽĨĞĞƐ;ŝ͘Ğ͘ΨϯϯďLJŵĂŝůĂŶĚΨϭϱŝŶ- ƉĞƌƐŽŶͿ͕^ƚĂīƌĞĐŽŵŵĞŶĚƐƐƚƌĞĂŵůŝŶŝŶŐĂŶĚŚĂǀŝŶŐŽŶĞĨĞĞŽĨΨϯϯ͘ o ^&ĞĞƐ– ƐĞǀĞƌĂůĨĞĞƌĞĐŽŵŵĞŶĚĂƟŽŶƐƌĞƋƵŝƌĞĚƵƉĚĂƚĞŽĨĐŽƐƚƌĞĐŽǀĞƌLJƉŽůŝĐLJ ĚĞƐŝŐŶĂƟŽŶ͘dŚŽƐĞǁŝůůďĞƵƉĚĂƚĞĚŝŶƚŚĞŝƚLJ͛ƐĨĞĞƐŽŌǁĂƌĞĂĐĐŽƌĚŝŶŐůLJ͕ĂŶĚůŝƐƚĞĚ ďĞůŽǁ͗
ƒ DĂŝůŝŶŐ͗DĞĚŝƵŵĐŽƐƚƌĞĐŽǀĞƌLJ
ƒ ƵƉůŝĐĂƚĞZĞĐĞŝƉƚƐ͗DĞĚŝƵŵĐŽƐƚƌĞĐŽǀĞƌLJ
o ZĞĂů
ƐƚĂƚĞ- ŽŶǀĞLJĂŶĐĞ– ŽŵŵŝƩĞĞĚŝƌĞĐƚĞĚĨƵůůĐŽƐƚƌĞĐŽǀĞƌLJ ĂŶĚƚŚĞƌĞĐŽŵŵĞŶĚĞĚ ĨĞĞŝƐƵƉĚĂƚĞĚĂĐĐŽƌĚŝŶŐůLJ͗
Item 1
Attachment A - Additional
Staff Recommended
Technical Adjustments
Item 1: Staff Report Pg. 13 Packet Pg. 60 of 68
ƩĂĐŚŵĞŶƚ
ĚĚŝƟŽŶĂů^ƚĂīZĞĐŽŵŵĞŶĚĞĚdĞĐŚŶŝĐĂůĚũƵƐƚŵĞŶƚƐ
A-Ϯ
o ZĞŵŽǀĞƚǁŽƌĞĨĞƌĞŶĐĞƐƚŽƚŚĞŝƚLJŽĨdŚŽƵƐĂŶĚKĂŬƐĨƌŽŵƚŚĞDĂƚƌŝdžƌĞƉŽƌƚ͘dŚŝƐŝƐ ĚŽŶĞĂŶĚƚŚĞƌĞǀŝƐĞĚƌĞƉŽƌƚŝƐƉŽƐƚĞĚĂŶĚĂůƐŽƉƌŽǀŝĚĞĚĂƐĂƐƵƉƉůĞŵĞŶƚĂůƚŽ ŽŵŵŝƩĞĞDĂLJϮϬƚŚ ĂŐĞŶĚĂ͘
o WŽůŝĐĞ^ƉĞĐŝĂů
ǀĞŶƚƐ&ĞĞƐ– ƵƉĚĂƚĞƟƚůĞƚŽƉƌŽƉĞƌůLJƌĞŇĞĐƚĂƉƉůŝĐĂŶƚƐƚŚĂƚĂƌĞŶŽŶ-ƉƌŽĮƚ ĂŶĚĐŽ-ƐƉŽŶƐŽƌƐŚŝƉ͘&ĞĞƟƚůĞƐĂƌĞƵƉĚĂƚĞƐĂƐĨŽůůŽǁƐ͗
ƒ WĞƌƐŽŶŶĞůZĂƚĞƐĨŽƌ^ƉĞĐŝĂů
ǀĞŶƚƐ
ƒ WĞƌƐŽŶŶĞůZĂƚĞƐĨŽƌ^ƉĞĐŝĂů
ǀĞŶƚƐďLJEŽŶ-WƌŽĮƚKƌŐĂŶŝnjĂƟŽŶƐ
ƒ WĞƌƐŽŶŶĞůZĂƚĞƐĨŽƌ^ƉĞĐŝĂů
ǀĞŶƚƐŽ-^ƉŽŶƐŽƌĞĚďLJƚŚĞŝƚLJŽĨWĂůŽůƚŽ
o ŶŝŵĂůĐŽŶƚƌŽůŝŵƉŽƵŶĚŵĞŶƚĨĞĞƐ-- ƌĞǀŝĞǁĞƐƉĞĐŝĂůůLJĨŽƌϱŽƌŵŽƌĞŝŶĐŝĚĞŶƚƐ͘^ƚĂī ƌĞĐŽŵŵĞŶĚƐƚŚĞƐĞĨĞĞƐ ƚŽƌĞŇĞĐƚƌĂƚĞƐŚŝŐŚĞƌƚŚĂŶĐŽƐƚƐĨŽƌϱŽƌŵŽƌĞŝŶĐŝĚĞŶƚƐ͗ o &ůŽŽĚnjŽŶĞĚĞƚĞƌŵŝŶĂƟŽŶůĞƩĞƌƐĨĞĞƐ– ƌĞǀŝĞǁƚŚĞĐŽƐƚ͘^ƚĂīƌĞǀŝĞǁĞĚĂŶĚĐŽŶĮƌŵƐƚŚĞ ĐŽƐƚƐĂƌĞƐƵƉƉŽƌƚĞĚďLJƐƚĂīƟŵĞŝŶĐƵƌƌĞĚĨŽƌƌĞǀŝĞǁĂŶĚĚŝƐĐƵƐƐŝŽŶǁŝƚŚƌĞƋƵĞƐƚŽƌŽĨ ŇŽŽĚnjŽŶĞĚĞƚĞƌŵŝŶĂƟŽŶůĞƩĞƌƐǁŚŝĐŚŽŌĞŶĞŶƚĂŝůƋƵĞƐƟŽŶƐ͕& DnjŽŶĞĐŽŶĮƌŵĂƟŽŶ
ĂŶĚŵĞĞƟŶŐƐǁŝƚŚƌĞƋƵĞƐƚŽƌ ͘
o dĂdžŝĨĞĞ- ŶĞǁůŝĐĞŶƐĞĂƉƉůŝĐĂƟŽŶ– ƌĞǀŝĞǁƚŚĞĐŽƐƚĞƐƟŵĂƚĞ͘^ƚĂīƌĞǀŝĞǁĞĚ ƚŚĞ ĞƐƟŵĂƚĞĚƐƚĂīƟŵĞ ĂŶĚĚĞƚĞƌŵŝŶĞĚƚŚĂƚ^ƚĂīĐŽƵůĚĐŽŵƉůĞƚĞĂƚĂdžŝƉĞƌŵŝƚŶĞǁ ĂƉƉůŝĐĂƟŽŶǁŝƚŚŝŶϮϬŚŽƵƌƐŝŶƐƚĞĂĚŽĨƚŚĞƉƌŝŽƌϯϬŚŽƵƌĞƐƟŵĂƚĞ͕ĂŶĚƌĞĐĂůĐƵůĂƚĞĚƚŚĞ Item 1
Attachment A - Additional
Staff Recommended
Technical Adjustments
Item 1: Staff Report Pg. 14 Packet Pg. 61 of 68
ƩĂĐŚŵĞŶƚ
ĚĚŝƟŽŶĂů^ƚĂīZĞĐŽŵŵĞŶĚĞĚdĞĐŚŶŝĐĂůĚũƵƐƚŵĞŶƚƐ
A-ϯ
ĐŽƐƚĞƐƟŵĂƚĞƚŽΨϰ͕ϴϰϵ. ^ƚĂīƌĞĐŽŵŵĞŶĚƐĨƵůůĐŽƐƚƌĞĐŽǀĞƌLJĂŶĚƐĞƫŶŐƚŚĞĨĞĞĂƚ Ψϰ͕ϴϰϵ͘
o ŽŵŵŝƩĞĞǁŝƐŚĞƐƚŽĐƌĞĂƚĞĂŶĞǁϭϬϬйĂƚĞŐŽƌLJǁŝƚŚŝŶƚŚĞŝƚLJ͛ƐŽƐƚZĞĐŽǀĞƌLJPŽůŝĐLJ. dŚŝƐǁŝůůďĞĂĚĚĞĚƚŽ&ŝŶĂŶĐĞŽŵŵŝƩĞĞĂƐĂƌĞĨĞƌƌĂůƚŽŽƵŶĐŝůĂŶĚŵĂLJďĞĐŽŶƐŝĚĞƌĞĚ ŝŶϮϬϮϱǁŽƌŬƉůĂŶ͘
Item 1
Attachment A - Additional
Staff Recommended
Technical Adjustments
Item 1: Staff Report Pg. 15 Packet Pg. 62 of 68