CITY COUNCIL STAFF REPORT
Meeting Date: June 26, 2023
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: ADOPT RESOLUTION NO. ___-23 APPROVING THE CHANGES TO THE FISCAL YEAR 2023/2024 MASTER FEE SCHEDULE
SYNOPSIS
Staff is seeking the City Council’s approval of proposed changes to the fiscal year (“FY”) 2023/24 Master Fee Schedule (“MFS”), which would become effective September 1, 2023 as recommended by the Budget Committee at its meeting of June 14, 2023.
DISCUSSION
Background
A user fee, or service fee, is a payment made by an individual for a service that primarily benefits that individual. By law, user fees may not exceed the reasonable cost of the service for which they are collected. The intent of user fees is to cover 100% of the costs of providing the service associated with the fee. Included in the costs of the service are three components:
Direct Labor. Employee hours spent directly on the fee-related service. This rate includes the employee’s salary and benefits.
Departmental Indirect Labor. Departmental employees not directly working on the feerelated service, but responsible for supervision and administrative activities. This cost layer includes administrative support staff and a portion of the department head’s time. Central Overhead. This component includes cost for those departments that provide support to other City departments (e.g. City Attorney, City Manager, Finance and Human Resources).
On June 16, 2003, the City Council adopted Resolution No. 51-03 approving the FY 2003/04 MFS. This resolution provided that certain fees may be adjusted annually on July 1 beginning in 2004 by the annual percentage change, as of March 1, in the Consumer Price Index (“CPI-U”) for the San Francisco-Oakland-San Jose metropolitan area. The March 1 date was selected because this information would be the most current available prior to July 1 of each year. The City Council identified some fees that were not intended to be increased annually by the cost of living, identified on the MFS with an asterisk (*), some of which are limited by State law. As of March 1, 2023, the year-over-year change in the CPI-U is 5.3%.
Analysis
The MFS for FY 2023/24 includes the following substantive change:
Annual CPI Adjustment - A 5.3% increase in permissible fees, which as of March 1, 2023, represents the change in the Consumer Price Index (CPI-U) over the prior year for the same period in the San Francisco-Oakland-San Jose metropolitan area. (For ease of administration, fees will be rounded to the nearest whole dollar whenever possible.).
FISCAL IMPACT
The impact on General Fund revenue will depend on the activity, and the increase to the fees is designed to recoup reasonable cost increases for providing services.
PUBLIC CONTACT
Public contact was made through the posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Police Department, and at the Pleasant Hill Senior Center. The agenda and staff report are posted on the City’s web page. A notice (attached) was also published twice in the East Bay Times newspaper, on June 6, 2023 and June 13, 2023. In addition, notices were e-mailed to interested parties who had filed a written request with the City to be informed when the annual update of the MFS was to occur.
RECOMMENDED CITY COUNCIL ACTION
Adopt the resolution authorizing the changes to the Master Fee Schedule, as recommended by the Budget Committee.
ALTERNATIVES TO RECOMMENDED ACTION
Provide staff with direction regarding revisions to the Master Fee Schedule.
Prepared by: Erick Cheung, Finance Manager
Ross Yangwas, Accountant
Approved by: Ethan Bindernagel, Interim City Manager