City of P Beach
Comprehensive User Fee Study
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40 Timeline
• 2015: Last comprehensive user fee study performed and approved by Council in 2015 in Resolution R-2015-036.
• City user fees are updated, if applicable, by Consumer Price Index annually • Numerous updates to modify or add additional fees since 2015. • February 24, 2025 Special Council Meeting Study Session City User Fees • March 18, 2025 Public Hearing
• March 18, 2025 Effective Date of reduced Massage Establishment Permit Fees and the Massage Therapist Permit Fees
• July 1 , 2025 Effective Date of all other City User Fees • July 1 , 2026 Fees updated by CPI inflation factors, excluding certain fees z
February 24, 2025 Special Council Meeting Study Session
• Willdan Financial Services (Willdan) and City staff presented the Study methodology and proposed maximum justified City User Fees schedule and staff's recommended subsidies
• Council provided direction on modifying the proposed fees and requested that staff return with a revised fee schedule.
• Parking Fees for failure to pay for parking and the expire meter or kiosk receipt fees - to be reviewed by the Parking Advisory Committee to review these fees established in the Pismo Beach Municipal Code;
• Junior Lifeguard program fees — setting up an account for scholarships/financial assistance for Pismo Beach residents
• Special Event Permit fees, specifically weddings on the beach, requesting more information on State Parks agreement.
3 February 24, 2025 Special Council Meeting Study Session (continued )
• Council directed staff to:
• keep the Appeal to City Council Processing All actions except Coastal Development Permits at $985 per appeal application;
• keep the Appeal to Planning Commission fee at $1 ,069.00 per application; • reduce the Massage Parlor/Establishment Biennial Permit Fee to $50/renewal; and • reduce the Massage Therapist Permit Fee to $50 • move forward with all the other proposed fees for the Public Hearing. 4 What are User Fees
• Provide private benefit with limited or no community benefit • State law requires that 1 ) individual use of the service must be voluntary, and 2) fees must reasonably relate to the services provided
• Fee levels & cost recovery determined through City Council fee adoption
• Does not include development impact fees , utility rates , taxes , etc.
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5 Policy Considerations
• State regulations require that municipalities update their fee schedules to reflect the actual costs of certain public services primarily benefiting users. • General standard : individuals or groups who receive private benefit from service should pay 100% of cost
• In certain situations, subsidization is an effective public policy tool :
o Encourage participation
o Ensure compliance when cost is prohibitive to residents o Promote access to services
• Recommend that City utilize inflation factor to annually adjust fees based on CPI , MOU , or another factor
• Comprehensive fee study every 3-5 years
6 Why Update User Fees
• Subsidies in services impact the General Fund o Private & specific benefit services are subsidized by general fund o Reduces ability to fund general benefit activities like public safety & community events/programs
• Decreased department funding can impact service quality/delivery • Cost recovery knowledge and planning
o Provides clarity of pressures on City resources o Enables City to strategize and set fees to benefit of the City and community
0 State requirements for reasonable cost-based fees
40 User Fee Objectives & Steps
• Determine full cost of providing services or programs • Review fee schedules based on service delivery
• Identify potential new fees (not currently collected) • Remove or restructure obsolete fees
• Using fully-burdened rates, calculate full cost recovery • Update fees for services based on cost analysis • Incorporate or establish cost recovery goals
Subsidies allow access to services and can facilitate compliance • Identify appropriate fee levels that:
• Enhance reasonability and applicability where desired • Maintain consistency with local policies and objectives • Maintain legal compliance with state law
8 Cost of Service Calculation
• Primary types of data used :
o Salary & Benefits
o Services and supply costs
o Indirect support costs
o System and maintenance costs
• Hourly rates structured to account for direct work hours FrSala Fr 1, Fully
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Benefit Indirect Hourly
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13 Fee Cost Composition Example
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• Fully Burdened Hourly Permit
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rates predominately used
to calculate full cost for Department � fees Director Inspector
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• Important to keep in mind Fee or
all processes, personnel, Service
cross department, and �
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indirect support involved -� Engineer
to calculate full cost for L6
services I L City Clerk
14 Recommendation
• Conduct a Public Hearing to receive input from the public on the proposed user fees
• Adopt a Resolution adopting the City of Pismo Beach User Fee Update Study; making certain findings; and approving new User Fees effective on July 1 , 2025 , except Massage Establishment Permit Fees and Massage Therapist Permit Fees that are effective March 18, 2025 ; making certain findings; and rescinding various previous Resolutions
26 Questions
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