June 6, 2023
Finance Department
DATE: June 6, 2023
TO: Mayor Martinez and Members of the City Council
FROM:
Nickie Mastay, Deputy City Manager, Internal Services
Mubeen Qader, Deputy Director of Finance
Antonio Banuelos, Accounting Manager
Subject:
Approval of New Fees for a Revised Master Fee Schedule
FINANCIAL IMPACT: This update of the Master Fee Schedule adjusts User Fees by the Bureau of Labor Statistics Employment Cost
Index (ECI). The ECI adjusts for wage rate inflation in local governments. For those fees adjusted in 2022, the inflation factor is 9.1 percent. For fees adopted as part of the User Fee Study in 2022, the ECI adjustment is 6.4
percent.
Based on the level of activity in the prior year, the
proposed fee adjustments would generate additional
annual revenue totaling $846,000 for the City of
Richmond across various departments and funds.
PREVIOUS COUNCIL
ACTION:
May 2, 2023
STATEMENT OF THE
ISSUE:
Sections 2.34.040 (Schedule of fees and service
charges) and 13.45.020 (Approval of adjustments by City Council) of the Richmond Municipal Code authorize
periodic adjustments to all City levied fees and charges, subject to approval by the City Council. City staff is requesting adoption of an ordinance to establish new
fees and charges as outlined in the proposed Master Fee Schedule.
AGENDA
REPORT
June 6, 2023
RECOMMENDED ACTION:
ADOPT an ordinance (second reading) establishing
certain fees for the proposed Master Fee Schedule -
Finance Department (Mubeen Qader/Antonio Banuelos
510-620- 6741).
DISCUSSION:
Section 2.34.040 of the Richmond Municipal Code (RMC) (Schedule of fees and service charges) provides that “The City Manager shall review the fees and charges based upon the review schedule set forth (herein) and shall set and adjust the fees or charges so as to recover up to the … costs reasonably necessary to provide the listed regulations, products or services.”
Additionally, Sections 13.45.010 and 13.45.020 of the RMC, as recently amended by the Richmond City Council in its May 2, 2023 meeting, further provides that
The Director of Finance of the City shall adjust all city -levied taxes, fees and charges provided for in the Richmond Municipal Co de on a yearly basis, or as needed, in accordance with any increase or decrease in the Bureau of Labor Statistics Employment Cost Index (ECI), State and Local Government Workers component, during the preceding fiscal year.
Additionally, a comprehensive fee study should be conducted at least every five years.
And
Each year, the Director of Finance shall submit to the City Council a report listing all proposed adjustments for approval. No proposed adjustment shall take effect until it is approved by the City Council. The Council may reject, but may not modify, any one or more of the proposed adjustments in any report before approving the adjustments.
This update of the Master Fee Schedule adjusts user fees by the Bureau of Labor Statistics Employment Cost Index (ECI). The ECI adjusts for wage rate inflation in local governments. In this update, City staff is proposing to update fees by 6.4 percent or 9.1 percent. The 6.4 percent inflation factor will be used for those fees rates that were part of the User Fee Study update from Willdan and approved in March and May 2022. The
6.4 percent corresponds to the change of the ECI from the previous fee adoption date.
The 9.1 percent inflation factor will be used for most other fees that were not part of the User Fee Study. This 9.1 percent change factor captures the change in ECI adopted in March 2022 and May 2022 that used the 2021 ECI index.
The Finance Department has worked with Willdan Financial Services to develop the City of Richmond’s Impact Fee and User Fee reports. The scope of services provided under this program are designed to produce reports used in updating the Master Fee Schedule to help better capture City costs incurred in providing City services and to
June 6, 2023
offset the impacts of new development. The Impact Fee section is still pending, and Finance staff will return shortly with those proposed changes.
The Master Fee Schedule proposed for adoption by the City Council includes the following changes and/or adjustments:
The fee schedule is adjusted to reflect the change in the ECI, as provided in Section 13.45.010 of the RMC. To conform to legal requirements, the effective date for fees adjusted by the ECI is 30 days after City Council’s final approval of the ordinance amendment and adoption of the resolution.
The Community Development Department worked with SCI Consulting Group to process the Cost Recovery Analysis for the Commercial Cannabis Regulatory Fees. The proposed cannabis regulatory fees capture the cost of permitting and regulating cannabis operations by various City departments. This study was undertaken to reflect the transition of enforcement activities from the Richmond Police Department to the Code Enforcement Unit, and updated activities by various City departments. These costs are then allocated to the payor in a way that demonstrates that the costs bear a fair or reasonable relationship to the payor’s burden on or benefits from the program. These new fees are listed in the Ordinance (Attachment 1 – MFS Ordinance and Attachment 3 – Commercial Cannabis Regulatory Fees Report 2023).
The Subregional Transportation Mitigation Program (STMP) Fees included in the Impact Fees section are set by West Contra Costa Transportation Advisory Committee (“WCCTAC”). The updated rates are effective July 1, 2023. (Attachment 4 – STMP Memo).
The Recreation facility rental fees for the various sites display the current discounts given to both rentals to other government agencies (discount of 50 percent) and non-profit rentals (discount of 25 percent).
The Transportation – Parking Management Fees were part of the User Fee Study and should have been included in the 2022 update but were not. The proposed fees found in this update are those from the study plus the ECI increase applied to the rest of the fees in the User Fee Study.
City staff is currently working with Willdan Financial in finalizing the Impact Fees.
The scope of services provided under this program is designed to produce reports used in the updating of the Master Fee Schedule to help better capture City costs in providing City services and to offset the impacts of new development.
June 6, 2023
NEXT STEPS:
City staff will return on June 6, 2023, for the adoption (second reading) of the ordinance adopting the new fees and adoption of the resolution amending the current fees.
City staff will also return in the next few weeks with proposed updates to the impact fees, including the traffic impact fees, that are currently being developed by its impact fee consultant, Willdan Financial. Due to recent legislation, further technical work is required to justify traffic impacts fees by developing a long-term plan that demonstrates how a City will expand its transportation resources in order to mitigate the impacts of new development. Public Works staff is updating a list of traffic projects (with one of the City’s on-call consultants). This list of projects may include projects which facilitate movement of traffic, mitigate safety impacts, and/or address the growing requirements for all travel modes consistent with SB 743 (e.g., complete streets, bicycle projects, pedestrian improvements, transit improvements, etc.).
Additionally, City staff will return to City Council with an amendment to the contract with Willdan Financial requesting to amend the scope. We seek to review fees collected and determine if there are additional fees collected by other cities that we could incorporate into the Master Fee Schedule.
DOCUMENTS ATTACHED:
Attachment 1 – Ordinance
Attachment 2 – Proposed Master Fee Schedule
Attachment 3 – Cannabis Fees Memo
Attachment 4 – STMP Memo
Attachment 5 – Resolution