Staff Report - 2023-24 Citywide Fee Schedule Updates [Noticed on 05-05-2023 and 05-15-2023]

City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-00318 5/16/2023 Public Hearing Item 4.
2023/24 Citywide Fee Schedule Updates [Noticed on 05/05/2023 and 05/15/2023] File ID: 2023-00318
Location: Citywide
Recommendation: Conduct a public hearing and upon conclusion adopt a Resolution approving the Citywide Fee Schedule Updates.

Contact: Jason Bader, Principal Budget Analyst, (916) 808-5817; Mirthala Santizo, Budget Manager, (916) 808-5078, [email protected]; Leyne Milstein, Interim Director of Finance, (916) 996-4065, [email protected], Department of Finance Presenter: Jason Bader, Principal Budget Analyst, (916) 808-5817, [email protected], Department of Finance.

Attachments:
1-Description/Analysis
2-Fee Policy
3-Proposition 26
4-Resolution
5-Exhibit A Adjustments to Fees and Charges
Additional Description/Analysis
Issue Detail: Issue Detail: On February 7, 2006 (Resolution 2006-106), the City Council (Council) formally adopted a citywide Fees and Charges Policy to ensure that City fees and charges reflect Council’s direction regarding recovery of costs related to providing programs and services. The policy was amended on May 8, 2014, to modify language stating the City will use the State of California Department of Industrial Relations Consumer Price Index (CPI), the same index used by the County Assessor to adjust the annual property tax roll for inflation (Attachment 2). The policy identifies five major categories of fees the City currently implements: impact/development fees, service fees, regulatory fees, rental fees, and penalties/fines. The policy sets the guidelines for cost recovery goals, determines the categories of cost recovery levels, and allows for establishment and modification of fees and charges. Periodically, fees and charges need to be changed to reflect

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File ID: 2023-00318 5/16/2023 Public Hearing Item 4.
increases in costs or new/changing circumstances.

The fiscal year (FY) 2023/24 Proposed Budget was released on May 1, 2023, and includes the changes recommended in this report. Changes to City fees and charges requiring Council approval are included in Exhibit A. The following chart summarizes the number of proposed fee changes by fund and Department, and the revenue adjustments included in Department revenue budgets:

Fund Group / Department (Fund)
New
Fees
Fee
Changes
Fee
Deletions
Grand
Total
Dollar
Change
General
City Attorney 1 12 3 16 31,500 Community Development 1 1 1 3 0 Convention and Cultural Services 4 2 12 18 0 Fire 117 117 1,867,000
Public Works 4 7 11 53,000
Youth, Parks and Community Enrichment 16 4 20 53,000 Subtotal General Fund 26 143 16 185 $2,004,500 Other
Convention and Cultural Services (Community Center)4 67 71 103,500 Public Works (Marina) 2 3 5 5,000 Public Works (Parking) 4 5 9 139,000 Public Works (Private Development) 1 30 5 36 38,200 Public Works (Solid Waste) 52 52 2,000
Utilities (Storm Drainage) 1 1 0
Youth, Parks and Community Enrichment (4th R) 9 9 452,000 Subtotal Other Funds 11 167 5 183 $739,700 Total All Funds 37 310 21 368 $2,744,200

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File ID: 2023-00318 5/16/2023 Public Hearing Item 4.

The following provides details on the major changes reflected in the chart above:
· The City Attorney updated its current blended fee to reflect actual attorney and staff costs. As a result, the rates for hourly services on the fee and charges schedule have been changed to capture the increase of the cost of the service provided. · The Community Development Department has three adjustments in this year’s report. The first two adjustments consolidate the environmental exemptions review process and update the charge to the average time spent for better cost recovery. The optional Accessory Dwelling Unit application brings the City into compliance with state legislation and the ensuing process changes. Due to uncertain activity levels for these fees and other revenue sources in Special Permit Fees, no financial adjustments are recommended.
· The Convention & Cultural Services History Division is reducing fees for small digitization projects and individual photos to remove a barrier to access for our patrons. The fees for larger projects are increasing to compensate for the reduced fees. The larger projects are corporate clients, allowing us to charge Sacramento County residents less going forward. · The Fire Department is amending fees for two programs to offset the cost of providing the programs and services.
o The Fire Prevention Program is amended to include an annual fee increase each July 1st, by the percentage change in the CPI Series Title: Urban Wage Earners and Clerical Workers the U.S. City Average, All Urban Consumers-not seasonally adjusted, for San Francisco-Oakland- San Jose, CA as published by the U.S. Department of Labor, Bureau of Labor Statistics for the twelve (12) month period ending December 31 of the preceding year.
o The Fire Department Emergency Medical Services Program is amended to include an annual fee increase each July 1st, by the percentage change in the CPI Series Title:

Medical Care in the U.S. City Page 7 of 14 Average, All Urban Consumers, Not Seasonally Adjusted, as published by the U.S. Department of Labor, Bureau of Labor Statistics for the twelve (12) month period ending December 31 of the preceding year. · The Public Works Department is recommending modifications to better reflect current market conditions and provide true cost recovery for services provided. o Overall, deposits and fees have increased for Public Works services related to private

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File ID: 2023-00318 5/16/2023 Public Hearing Item 4.
development. Changes have been made to some private development applications to transition from full cost recovery to a flat fee to reduce the administrative burden to City staff with opening, maintaining, and closing project accounts in addition to monitoring project account balances, collecting additional funding by billing customers, and preparing refund checks for small amounts when project balances are positive at project completion. Private development project fees that are already covered by other fee categories are being deleted as duplicates, and several fees that are no longer in use due to changes in policy that eliminated the need for Public Works review are also being deleted.
o The parking violation for a truck or trailer parked in a residential area will be updated to mirror the unattached trailer violation per Sacramento City Code 10.36.080 to deter trucks from parking in residential areas. New violations will be established to keep electric vehicle (EV) charging spaces available for use pursuant to the California Vehicle Code 22511.1, for parking or leaving a vehicle that is not connected and actively charging in an EV charging space or obstructing/blocking access to an EV charging space.
o On January 10, 2023, the fee schedule for the Al Fresco Dining Program was established to allow qualifying restaurants to operate outdoor dining within the City’s right-of-way. A late fee will be added to the new fee structure. o Administration fees have been added to recover the cost of services rendered to on- street reservations and off-street administrative support. The City’s Parking Division is now managing The Mezzo parking lot per a cooperative agreement. On-street parking fees with carshare companies are also being updated per the City’s contracts to reflect the average revenue collected per meter for the prior fiscal year. The commuter rate special range is being updated to $3 - $15 to manage parking space demand and availability.
o The Marina is proposing rate changes to recover operating costs of overnight docking, electrical hookup and unpaid invoices. New fees will be introduced to allow lifts in boat slips and to allow an additional personal watercraft or dinghy per boat slip if it meets the necessary requirements, improving customer experience and satisfaction. o The Recycling and Solid Waste Division now oversees commercial waste hauling and charges a franchise hauler application processing fee that is consistent with the amount the now-dissolved Sacramento Regional Solid Waste Authority charged when it oversaw commercial hauling in the City. The Construction and Demolition Debris Recycling Security Deposit was approved by Resolution No. 2009-027 but was not added to the Fee and Charge Report at the time. The deposit provides an incentive for

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File ID: 2023-00318 5/16/2023 Public Hearing Item 4.
project applicants to comply with California Green Building Standards Code and supports the City’s implementation of State Senate Bill 1383. Household Hazardous Waste (HHW) disposal fees have been updated based on actual costs of disposal during the previous fiscal year.
· The Department of Utilities is modifying the verbiage for the Building Plan Review hourly rate to clarify that full cost recovery is non-refundable for a two-hour deposit for commercial permits.
· The Youth, Parks & Community Enrichment Department (YPCE) proposed changes and fee additions to create additional fee structure for the Community Recreation-Adult and Youth Sports Division and Community Centers. The proposed changes will accommodate the many new features and programs. YPCE also made modifications to current fee structures to better align with industry standards and the proposed fee structure will allow the flexibility needed to operate all programs without limitations this upcoming fiscal year.

Except for the CDD fees, the proposed fee and charge changes will take effect on July 1, 2023. The CDD fees will not go into effect until July 23, 2023, as these fees require a 60-day notice after adoption, prior to implementation.

Policy Considerations: The changes proposed are consistent with Council’s adopted Fees and Charges Policy and support the City's budget sustainability and fiscal responsibility goals.

Proposition 26 (Attachment 3) was passed by the voters on November 2, 2010, amending Article XIII C of the state constitution. According to the ballot measure, the intent of the measure is to ensure the effectiveness of Propositions 13 and 218 by providing a definition of a “tax” for state and local purposes “so that neither the Legislature nor local governments can circumvent these restrictions on increasing taxes by simply defining new or expanded taxes as “fees.” Thus, under Proposition 26 a tax has been defined broadly to include any levy, charge, or exaction of any kind imposed by a local government, except for seven specified categories of charges. Moreover, the City bears the burden of proving that a fee or charge is not a tax. Toward this end, the report contains summary information, as appropriate, explaining why each proposed fee or fee increase is not a tax under Proposition 26.

Economic Impacts: Not applicable.

Environmental Considerations:

California Environmental Quality Act (CEQA): This report concerns administrative activities, government fiscal activities, and the modification of fees that do not constitute a “project” as defined by the CEQA Guidelines sections 15378 and California Public Resources Code section 21080 and are not subject to the provisions of CEQA (CEQA Guidelines section 15060

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File ID: 2023-00318 5/16/2023 Public Hearing Item 4.
(c)(3)).

Sustainability: Not applicable.

Commission/Committee Action: This report was presented to the Budget and Audit Committee on Tuesday, May 9, 2023. The Committee passed a motion supporting the recommended adjustments and forwarded it to the City Council for approval.

Rationale for Recommendation: The annual review of citywide fees and charges ensures that the City’s recovery of costs for services keeps pace with changes in the cost-of-living index, as well as changes in methods or levels of service delivery. The public hearing on this item is currently scheduled for May 16, 2023.

Financial Considerations: The review and adjustment of citywide cost recovery through fees and charges is an appropriate mechanism to ensure the continued recovery of costs for specified programs and services. In this case, it is important to note that the proposed fees and charges in this report are necessary to sustain existing programs and do not provide substantial additional resources. The report recommends adding 37 new fees, 310 modifications to the fee basis or language and 21 deletions.

The recommended adjustments will generate approximately $2 million annually in General Fund revenue and $740,000 annually for all other funds. These revenues are included in the FY2023/24 Proposed Budget, and any change would result in an amendment to the budgeted revenues as proposed.

Local Business Enterprise (LBE): None.

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RESOLUTION NO. 2014-0111
Adopted by the Sacramento City Council
May 8, 2014

APPROVING CITYWIDE FEE AND CHARGE ADJUSTMENTS

BACKGROUND
A. On February 7, 2006, the City Council adopted the Citywide Fees and Charges policy (Resolution No. 2006-106).

B. The City has used the Employee Cost Index for State and Local Government Employees, Total Compensation as published by the Bureau of Labor Statistics for inflationary adjustments. Beginning in FY2014/15 the City will use the State of California Department of Industrial Relations Consumer Price Index (CPI) which is the same index used by the County Assessor to adjust the annual property tax roll for inflation. This change will align adjustments for inflation affecting the City’s largest revenue source, property taxes, with the fees that are also indexed against inflation.

C. Implementation of the policy requires a necessary mechanism to ensure that the City’s fees and charges reflect the City's current costs and that those fees and charges are reviewed on an annual basis by City Council. Staff has conducted the required annual review and recommends certain new fees and fee adjustments.

D. Proposed new fees, deleted fees, and fee adjustments are set forth in Exhibit A.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1. The fee and charge policy is approved as amended in Exhibit A.

Section 2. The fee and charge adjustments as set forth in Exhibit B are hereby approved.

Section 3. Exhibits A and B are part of this resolution.

Table of Contents
Exhibit A: Amended Fee and Charge Policy
Exhibit B: FY2014/15 Adjustments to Fees and Charges
Resolution 2014-0111 Ma
y 8, 2014 Page 1 of 14
This exhibit, pages 8-14 of the Resolution, are not applicable to this report.

Attachment 2
Adopted by the City of Sacramento City Council on May 8, 2014, by the following vote:

Ayes: Members Ashby, Cohn, Fong, Hansen, McCarty, Pannell, Warren Noes: None
Abstain: None

Absent: Members Schenirer and Mayor Johnson
Attest:

Shirley Concolino, City Clerk
Resolution 2014-0111 Ma y 8, 2014 Page 2 of 14
Shirley A. Concolino
Digitally signed by Shirley A. Concolino
DN: cn=Shirley A. Concolino, o=City of Sacramento, ou=City Clerk, [email protected], c=US
Date: 2014.05.13 12:39:27 -07'00'

CITY OF SACRAMENTO FEES AND CHARGES POLICY
The City of Sacramento has the ability to determine the extent to which fees should be used to fund City facilities, infrastructure and services.

There are five main categories of fees that the City currently implements1:
99Impact/development fees are typically one-time charges levied by the City against new development to generate revenue for the construction of infrastructure and capital facilities needed to offset the effects of the new development.
9Service fees are charges imposed on persons or property that are designed to offset the cost of providing a government service. Sometimes these services are elective, such as fees for processing voluntary development permit applications, or providing service/recreation programs, while other service fees are not, such as mandatory service fees for trash or utility services. Such fees are typically reasonably related to the cost of providing the service for which the fee is imposed. Otherwise, the fee may constitute a special tax for which voter approval is required by Propositions 13, 62, and 218.
9Regulatory fees are imposed to offset the cost of a regulatory program, such as business regulatory fees, or to mitigate the past, present or future adverse impact of a fee payer’s operations. While payment of a regulatory fee does not necessarily provide any direct benefit from payment of the fee, there must be a "nexus" between the activity and the adverse consequences addressed by the fee. Common examples of regulatory fees include inspection fees and business license fees designed to reimburse a local agency for the cost of monitoring the business and enforcing compliance with City code.
9Rental fees are charged for the rental of public property and include the rental of real property, parking spaces in a public parking lot, or the rental of community facilities such as a recreation or community room or picnic area. Rental fees are not subject to the general rule that the fee must bear a direct relationship to the reasonable cost of providing the service for which the fee is charged however, rental fees must be fair and reasonable.
9Penalties/Fines are payment required for non-compliance or failure to adhere to specific rules and/or requirements.

This document sets forth guidelines for:
x Establishing cost recovery goals;
x Determining the categories of cost recovery levels in which to categorize/organize fees;
1 League of California Cities Website: Spring Meeting May 13-15, 1998Laurence S. Wiener, Esq.City Attorney of Beverly Hills and Westlake Village THE CITY ATTORNEY'S ROLE IN EVALUATING FEE STUDIES. ([KLELW$
$PHQGHG)HHDQG&KDUJH3ROLF\
Resolution 2014-0111 Ma y 8, 2014 Pa ge 3 of 14
x Methods for determining which category a fee falls under; and x Establishment and modification of fees and charges.

A. Cost Recovery Goals
In setting user fees and cost recovery levels, the following factors will be considered2:
1) The amount of a fee should not exceed the overall cost of providing the facility, infrastructure or service for which the fee is imposed. In calculating that cost, direct and indirect costs may be included. That is:
xx Costs which are directly related to the provision of the service; and, x Support costs which are more general in nature but provide support for the provision of the service. For example, service fees can include reimbursement for the administrative costs of providing the service.

Development fees can include the cost of administering the program to construct public facilities that are necessary to serve new development.
2) The method of assessing and collecting fees should be as simple as possible in order to reduce the administrative cost of collection. 3) Fees should be sensitive to the “market” for similar services.

In addition, in setting enterprise fund fees and cost recovery levels, the following factors will be considered:
4) The City will set fees and rates at levels which fully cover the total direct and indirect costs, including operations, capital outlay and debt service of the enterprise programs.
5) The City will review and adjust enterprise fees and rate structures as required to ensure that they remain appropriate and equitable.

B. Categories of Cost Recovery Levels in Which to Categorize/Organize Fees There are five categories of cost recovery levels in which to classify fees:

1. Enterprise: Full direct and indirect cost recovery (100% of total costs) for enterprise services such as water, sewer and solid waste, as well as impact/development fees.

2. High: Full direct cost recovery (81-100% of total costs).

3. Medium: Recovery between 41-80% of direct costs.

4. Low: Recovery between 0-40% of direct costs.
2 Government Finance Officers Association Website, Best Practices in Public Budgeting, City of San Luis Obispo: User Fee Cost Recovery Goals, 2005.

Resolution 2014-0111 May 8, 2014 Page 4 of 14

5. Other: Fees based on market, geography, assessment, project specific, legal limits or specific Council policy.

The City may choose, for policy reasons, to set fees at less than full recovery.

For example, fees based on market, geography, assessment, project specific, statutory/legal limits or specific Council policy. In some cases, the City will acknowledge that a subsidy is acceptable, or even necessary to ensure program access and viability.

C. Methods for Determining Which Category a Fee Falls Under Implementation of higher cost recovery levels is appropriate under the following conditions (up to 100% of the cost of the service or program):
x The service is regulatory in nature (e.g. building permits, plan check fees); x The service is similar to services provided through the private sector; x Other private or public sector alternatives could or do exist for the delivery of the service;
x Over-use of the service is specifically discouraged (e.g. police responses to disturbances or false alarms might fall into this category). x Over-use of the service or facility is a specialized use that could be provided at a lower cost if not for specific nature or service (e.g. lighted fields).

Lower cost recovery levels are appropriate under the following conditions:
x There is no intended relationship between the amount paid and the benefit received. (It is likely that some recreation and human service programs fall into this category as it is expected that these programs will be subsidized by funds);
x Collecting fees is not cost-effective or will significantly effects the accessibility to the service;
x The service is non-recurring, generally delivered on a peak demand or emergency basis, cannot be planned for and is not readily available from a private sector source (e.g. public safety services);
x Collecting fees would discourage compliance with regulatory requirements and adherence is primarily self-identified, and as such, failure to comply would not be readily detected by the City.

Other:
x Market pricing requires that there be a direct relationship between the amount paid and the level and cost of the service received or a direct relationship to actual prices being charged for the service in the current market. x Legal specifications and/or limitations to the amount that is charged. x Adopted Council Policy setting specific fee.

Resolution 2014-0111 Ma y 8, 2014 Pa ge 5 of 14
Factors to Consider
The extent to which the total cost of service should be recovered through fees depends upon the following factors:
99The nature of the facilities, infrastructure or services; 9 The nature and extent of the benefit to the fee payer; 9 The effect of pricing on the demand for services; and 9 The feasibility of collection and recovery.

The chart below reflects these factors and the potential options for higher or lower cost recovery3:

The Nature of the
Facilities,
Infrastructure or
Services
The Nature and
Extent of the Benefit
to The Fee Payers
Effect of Pricing on
the Demand for
Services
Feasibility of
Collection
and Recovery
Higher Cost Recovery
In the case of fees
for facilities,
infrastructure and
proprietary
services
4, total cost
recovery may be
warranted.

When a particular
facility or service
results in substantial,
immediate and direct
benefit to fee payers,
a higher percentage of
the cost of providing
the facility or service
should be recovered
by the fee.

Because the pricing
of services can
significantly affect
demand, full cost
recovery for services
is more appropriate
when the market for
the services is strong
and will support a
high level of cost
recovery.

In the case of
impact fees,
which can be
collected at
the time of
issuance of a
building
permit, ease
of collection is
generally not
a factor.

Lower Cost Recovery
In the case of
governmental
services5, it may be
appropriate for a
substantial portion
of the cost of such
services to be borne
by the City’s
taxpayers, rather
than the individual
users of such
services.

When a particular
facility or service
benefits not only the
fee payer but also a
substantial segment of
the community, lower
cost recovery is
warranted.

If high levels of cost
recovery affect
accessibility to or
negatively effect the
delivery of services to
lower income groups,
this should be
considered based on
the overall goals of
the program being
implemented.

Some fees
may prove to
be impractical
for the City to
utilize if they
are too costly
to administer.

D. Establishment and Modification of Fees and Charges
3 Government Finance Officers Association Website, Best Practices in Public Budgeting, City of Fort Collins, CO: User Fee Policies, 2005.
4 Proprietary services are those which are provided for the benefit and enjoyment of the residents of the City 5 Governmental services are those which are provided by the City for the public good such as regulating land use, maintaining streets, and providing police and fire protection.

Resolution 2014-0111 Ma y 8, 2014 Pa ge 6 of 14
Fees will be reviewed and updated on an ongoing basis as part of the annual budget process to ensure that they keep pace with changes in the cost-of-living as well as changes in methods or levels of service delivery. At the beginning of the budget process each department will submit a list of proposed adjustments to their section of the master fee schedule. Each service must be assigned a target cost recovery level as defined above.

Maintaining competitive status and comparability with other cities should be considered when determining new fee levels. Those fees that are proposed for adjustment should be benchmarked against neighboring jurisdiction fee schedules or appropriate service markets. The benchmark analysis should be taken into consideration when making final pricing decisions.

However, the City may choose, for policy reasons, to set fees at less than full recovery. (for example, fees based on market, geography, assessment, project specific, statutory/legal limits or specific Council policy). As stated above, in some cases, the City will acknowledge that a subsidy is acceptable, or even necessary to ensure program access and viability. Where appropriate, fees that have not been increased in some time should have increases phased in over several years to avoid ‘sticker shock’ increases.

If a particular fee is not adjusted in the budget process, to the extent feasible and/or appropriate, it should be increased biennially by a CPI factor to keep pace with inflation.

Beginning in FY2014/15 the City will use the State of California Department of Industrial Relations Consumer Price Index (CPI) which is the same index used by the County Assessor to adjust the annual property tax roll for inflation.

Biennially, the Finance Department shall determine the percentage change in this index and apply the increase or decrease to the master fee schedule, rounding up to the nearest whole dollar. Certain fees are exempt from an index adjustment, such as fees set by the State of California, percentage-based fees or those that have been identified as inappropriate for indexed fee increases (e.g. feasibility or fees that are based on market for services). Exempt fees are noted in the master fee schedule.

Council may consider fee issues outside of the annual budget process on a case-by- case basis.

The City should conduct a comprehensive cost of service analysis every five to seven years to ensure fees and charges are set appropriately. Generally, fees may be adjusted based on supplemental analysis whenever there have been significant changes in the method, level or cost of service delivery. For example, changes in processes and technology change the staff time required to provide services to the public. A cost of service study will identify and quantify these changes.

Resolution 2014-0111 Ma
y 8, 2014 Pa ge 7 of 14
Attachment 3
Proposition 26
Proposition 26, the “Stop Hidden Taxes Initiative ,” was passed by the voters on November 2, 2010, to amend Article XIII C of the S tate Constitution. According to the ballot measure, the intent of the measure is to ensure the effectiveness of Propositions 13 and 218 by providing a definition of a “tax” for state and local purposes “so that neither the Legislature nor local governments can circumvent these restrictions on increasing taxes by simply defining new or expanded taxes as ‘fees.” Accordingly, under Proposition 26 a tax has been very broadly defined.

Tax Defined:
“Tax” now means “any levy, charge, or exaction of any kind imposed by a local government, except for the following seven categories of charges:

Exception 1 – Benefit Conferred or Privilege Granted
A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable co sts to the local government of conferring the benefit or granting the privilege
Examples:
o Residential parking permit fees
o Professional licenses
o Business improvement assessments
Exception 2 – Government Service or Product
A charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product Examples:
o User fees for park and recreation programs
o Weed abatement fees
o Sidewalk curb repairs
Exception 3 – Licenses and Permits
A charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof
Examples:
o Building inspections
o Cardroom license
o Business licenses

Exception 4 – Use of City property
A charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property

Examples:
o City-owned parking lots
o Swimming pools
o Convention Center rentals
o Golf green fees

Exception 5 – Fines and Penalties
A fine, penalty, or other monetary cha rge imposed by the judicial branch of government or a local government as a result of a violation of law

Examples:
o City Code fines and penalties (e.g., 1.28.020)
o Parking fines

Exception 6 – Property Development Charges
A charge imposed as a condition of property development

Examples:
o Development impact fees

Exception 7 – Proposition 218 Fees
Assessments and property related fees imposed in accordance with the provisions of Proposition 218, Article XIII D

Examples:
o Utility fees for water, sewer, drainage, and solid waste o Street lighting assessments

Burden of Proof:

The paragraph following the seven enumerated exceptions states:
“The local government bears the burden of proving by a preponderance of the evidence [1] that a levy, charge, or other exaction is not a tax, [2] that the amount is no more than necessary to cover the reasonable costs of the government activity, and [3] that the manner in which those costs are allocated to a payor bear s a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity.” The latter two requirements only apply to the first three exceptions.

Thus, with the burden of proof now shifted to the C ity, that requires each department to take into consideration how it aims to prove that a proposed fee or fee increase is not a tax. The following analytical framework can assist in this regard.

Burden of Proof: A 3-step Analysis

1. The City must make a threshold determination whe ther one of the exceptions applies.

o If none apply, it is a tax subject to voter approval.

2. If Exceptions 1, 2, or 3 apply, the City must also show that the fee revenue will not exceed the reasonable costs of providing the related governmental activity (at the aggregate level).

3. Finally, the City must show that the costs are fairly allocated to the individual payors.

Attachment 4
RESOLUTION NO. 2023-XXX
Adopted by the Sacramento City Council
May 16, 2023

APPROVING CITYWIDE FEE AND CHARGE ADJUSTMENTS

BACKGROUND:

A. On February 7, 2006, the City Council adopted the Citywide Fees and Charges policy (Resolution No. 2006-106).

B. On May 8, 2014, the City Council amended the Fee and Charge Policy (Resolution No 2014-111). As a result effective in FY2014/15 the City is using the State of California Department of Industrial Relations Consumer Price Index (CPI) which is the same index used by the Sacramento County Assessor to adjust the annual property tax roll for inflation. This aligns adjustments for inflation affecting the City’s largest revenue source, property taxes, with the fees that are also indexed against inflation.

C. Implementation of the policy provides the necessary mechanism to ensure that the City’s fees and charges reflect the City's current costs and that those fees and charges are reviewed on an annual basis by City Council.

Staff has conducted the required annual review and recommends certain new fees and fee adjustments.

D. Proposed new fees, deleted fees, and fee adjustments are set forth in Exhibit A.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1. The fee and charge adjustments as set forth in Exhibit A are hereby approved.

Section 2. Exhibit A is part of the resolution.

Section 3. The Citywide Fees and Charges policy shall be adjusted on a biennial basis for all fees indexed against the State of California Department of Industrial Relations Consumer Price Index to keep pace with inflation.

Section 4. The Citywide Fees and Charges policy for the Fire Prevention Program is amended to include an annual fee increase each July 1st, by the percentage change in the Consumer Price Index (CPI) Series Title: Urban Wage Earners and Clerical Workers the U.S. City Average, All Urban Consumers—not seasonally adjusted, for San Francisco-Oakland- San Jose, CA as published by the U.S. Department of Labor, Bureau of Labor Statistics for the twelve (12) month period ending December 31 of the preceding year.

Section 5. The Citywide Fees and Charges policy for the Fire Department EMS Program is amended to include an annual fee increase each July 1st, by the percentage change in the Consumer Price Index (CPI) Series Title:

Medical Care in the U.S. City Page 7 of 14 Average, All Urban Consumers, Not Seasonally Adjusted, as published by the U.S.

Department of Labor, Bureau of Labor Statistics for the twelve (12) month period ending December 31 of the preceding year. A cost analysis will be prepared annually, and CPI increases will be implemented, provided that the increase does not exceed the cost of providing services.

Table of Contents:

Exhibit A – FY2023/24 Adjustments to Fees and Charges

Exhibit A
Fee # Department Fund Fee Name Action Current Fee Proposed Fee Justification Proposition 26 1 City Attorney General Development Agreements Modify $203/hr. $216/hr.

Change of hourly rate based on new
hourly rate for FY24. Effective date: July 1,
2023.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
2 City Attorney General Development Related Agreements - Legal Services Fee Modify $203/hr. $216/hr.

Change of hourly rate based on new
hourly rate for FY24. Effective date: July 1,
2023.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
3 City Attorney General
Financing Agreements: Agreement to
Reimburse Fees and Costs - Legal
Review Fee
Modify $203/hr. $216/hr.

Change of hourly rate based on new
hourly rate for FY24. Effective date: July 1,
2023.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
4 City Attorney General Estoppel Certificates Modify $203/hr. $216/hr.

Change of hourly rate based on new
hourly rate for FY24. Effective date: July 1,
2023.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
5 City Attorney General
City Attorney's Fee for CFD or AD
formation with issuance of first series
bonds
Delete $14,500 $0
Splitting out CFD and AD formation from
bond issuance. Fee ID: 3199.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
6 City Attorney General City Attorney's Fee for Issuance of CFD or AD bonds Modify $11,500 $11,500
Splitting bond issuance fee out of CFD
and AD formation with bond fee, and
creating distinct fees. Fee ID: 4227
This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
7 City Attorney General City Attorney's fee for CFD or AD formation Modify $3,000 $3,000
Splitting CFD and AD formation apart from
bond issuance, and creating distinct fees.

Fee ID: 4228
This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
8 City Attorney General City Attorney's Fee for annexation of territory to CFD or AD Modify $3,000 $3,000
Removing extemporaneous language.

Fee ID: 4229
This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
9 City Attorney General
City Attorney's Fee for serving as
issuer's counsel in the issuance of
certificates of participation
Modify $14,500 $14,500
Removing extemporaneous language.

Fee ID: 4311
This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
10 City Attorney General City Attorney's fee for refunding of outstanding bonds Delete $11,500 $0
Fee is already incorporated in other fee.

Fee ID: 5657
This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
11 City Attorney General Enterprise & Special Tax Revenue Bonds (TOT, DOU) Modify $14,500 $14,500
Removing extemporaneous language.

Fee ID: 5863
This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
12 City Attorney General All forms of Revenue Anticipation Notes Modify $14,500 $14,500 Removing and clarifying language. Fee ID:
5864
This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
13 City Attorney General CFD Change Proceedings - Legal Review Fee Modify $3,000 $3,000
Removing language regarding bond
issuance. Fee ID: 5872
This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
14 City Attorney General CFD Change Proceedings with Bond Issuance - Issuer's Counsel Fee Delete $14,500 $0
Deleting duplicative categories of fees.

Fee ID: 5873
This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
15 City Attorney General Legal Service Fee for EIFD Formation - Legal Review Fee Modify $3,000 $6,000
Increasing flat fee due to level of work
required. Fee ID: 5883
This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
16 City Attorney General Legal Service Fee for Amendment of EIFD IFP - Legal Review Fee Add $0 $6,000
New fee to differentiate the additional work
for amendment versus original formation of
EIFD.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, a fee for government
services.
17 Community Development General Environmental Review - Exemption (Commission Level) Modify $336 $588
Consolidate and increase fee for
environmental exemptions. An average of

3.5 hours of staff time is needed for review
of exemptions, regardless of level of
review. Rename fee to "Environmental
Review - Exemption." Effective date: July
23, 2023.

This charge is not a tax under Proposition 26 as it
falls under exception 2, a fee for governmental
service.
18 Community Development General Environmental Review - Exemption (Director Level) Delete $168 $0
Eliminate fee to incorporate all exemption
reviews.

Effective date: July 23, 2023.

This charge is not a tax under Proposition 26 as it
falls under exception 2, a fee for governmental
service.
19 Community Development General ADU application Add N/A $84 Establish a new fee in response to process
changes from SB897 and AB2221, which
prohibit the requirement of a separate
zoning review for ADUs. This would
provide a pathway for customers seeking
ADU verification, additionally it should
reduce the likelihood of building permit
denials resulting for non-compliance with
zoning standards.

Effective date: July 23, 2023.

This charge is not a tax under Proposition 26 as it
falls under exception 2, a fee for governmental
service.
20 Convention and Cultural
Services
Community
Center Chairs Modify $2.25 per chair, per day $3.00 per chair, per day Charge increased by 33.0%, within
industry standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
21 Convention and Cultural
Services
Community
Center Flat Bed Cart Modify $35.00 per hour $50.00 per hour Charge increased by 42.8%, within
industry standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.

S:\Operating Budget ‐ FY24\Fees & Charges\CC Report Sections\5‐16‐23 CC Fee Exhibit.xlsx Fee # Department Fund Fee Name Action Current Fee Proposed Fee Justification Proposition 26 22 Convention and Cultural
Services
Community
Center Forklift Modify $120.00 per hour, with operator $126.00 per hour, with operator Charge increased by 5.0%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
23 Convention and Cultural
Services
Community
Center
Lighting Package (Memorial Auditorium
only) Modify $775 $850
Charge increased by 9.6%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
24 Convention and Cultural
Services
Community
Center
Lighting Package (Performing Arts
Center only) Add $0 $850
Charge within industry standard cost
ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
25 Convention and Cultural
Services
Community
Center Lost Key Card/Badge Add $0 $20.00 per key card/badge Charge within industry standard cost
ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
26 Convention and Cultural
Services
Community
Center Manlift Modify $135.00 per hour, with operator $142.00 per hour, with operator Charge increased by 5.1%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
27 Convention and Cultural
Services
Community
Center Piano, 9' Steinway Grand Modify $575.00 per day $600.00 per day Charge increased by 4.3%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
28 Convention and Cultural
Services
Community
Center Piano, 9' Baldwin Grand Modify $450.00 per day $475.00 per day Charge increased by 5.5%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
29 Convention and Cultural
Services
Community
Center Piano, Yamaha Upright Modify $220.00 per day $235.00 per day Charge increased by 6.8%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
30 Convention and Cultural
Services
Community
Center Pipe & Drape Modify $7.00 per foot, per day $8.00 per foot, per day Charge increased by 14.2%, within
industry standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
31 Convention and Cultural
Services
Community
Center
Riser - Camera (4' x 4') heights 36", 48"
or 54" Modify $35.00 per section, per day $38.00 per section, per day Charge increased by 8.5%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
32 Convention and Cultural
Services
Community
Center Security Keys Modify
$19.00 per event (1st 2 keys
complimentary; each additional
incurs charge)
$20.00 per event (1st 2 keys
complimentary; each additional
incurs charge)
Charge increased by 5.2%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
33 Convention and Cultural
Services
Community
Center Security Keys Lost or Damaged Modify $175.00 per key $175.00 per key Charge within industry standard cost
ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
34 Convention and Cultural
Services
Community
Center Security Keys Recore Modify
$70.00 per room/key (1st room
complimentary; each additional
incurs charge)
$75.00 per room/key (1st room
complimentary; each additional
incurs charge)
Charge increased by 7.1%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
35 Convention and Cultural
Services
Community
Center
Sound Package (Memorial Auditorium
only) Add $0 $925
Charge within industry standard cost
ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
36 Convention and Cultural
Services
Community
Center
Sound Package (Performing Arts Center
only) Add $0 $3,000
Charge within industry standard cost
ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
37 Convention and Cultural
Services
Community
Center
Staging Sections (4' x 8') heights 36", 48"
or 54" Modify $45.00 per section, per day $50.00 per section, per day Charge increased by 11.1%, within
industry standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
38 Convention and Cultural
Services
Community
Center
Staging Sections (6' x 8') heights 16", 24"
or 32" Modify $35.00 per section, per day $40.00 per section, per day Charge increased by 14.2%, within
industry standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
39 Convention and Cultural
Services
Community
Center Table (Exhibit Use) Modify $15.00 per day $20.00 per day Charge increased by 33.3%, within
industry standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
40 Convention and Cultural
Services
Community
Center Table (Exam Use) Modify $12.00 per day $15.00 per day Charge increased by 25.0%, within
industry standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
41 Convention and Cultural
Services
Community
Center Table (Highboy) Modify $15.00 per day $20.00 per day Charge increased by 33.3%, within
industry standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
42 Convention and Cultural
Services
Community
Center Convention Center Attendant Modify $61.00 per hour $64.00 per hour Charge increased by 4.9%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, Government Service or
Product.
43 Convention and Cultural
Services
Community
Center Crowd Control Modify $28.00 per hour (4 hour minimum) $29.00 per hour (4 hour minimum) Charge increased by 3.5%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, Government Service or
Product.
44 Convention and Cultural
Services
Community
Center Crowd Control Supervisor Modify $34.00 per hour (4 hour minimum) $35.00 per hour (4 hour minimum) Charge increased by 2.9%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, Government Service or
Product.
45 Convention and Cultural
Services
Community
Center Crowd Director Modify $28.00 per hour (4 hour minimum) $29.00 per hour (4 hour minimum) Charge increased by 3.5%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, Government Service or
Product.
46 Convention and Cultural
Services
Community
Center Door Guard Modify $28.00 per hour (4 hour minimum) $29.00 per hour (4 hour minimum) Charge increased by 3.5%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, Government Service or
Product.
47 Convention and Cultural
Services
Community
Center Head Usher Modify $34.00 per hour (4 hour minimum) $35.00 per hour (4 hour minimum) Charge increased by 2.9%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, Government Service or
Product.

S:\Operating Budget ‐ FY24\Fees & Charges\CC Report Sections\5‐16‐23 CC Fee Exhibit.xlsx Fee # Department Fund Fee Name Action Current Fee Proposed Fee Justification Proposition 26 48 Convention and Cultural
Services
Community
Center Ticket Taker Modify $28.00 per hour (4 hour minimum) $29.00 per hour (4 hour minimum) Charge increased by 3.5%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, Government Service or
Product.
49 Convention and Cultural
Services
Community
Center TMP Guard Modify $34.00 per hour (4 hour minimum) $40.00 per hour (4 hour minimum) Charge increased by 17.6%, within
industry standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, Government Service or
Product.
50 Convention and Cultural
Services
Community
Center Ushers Modify $28.00 per hour (4 hour minimum) $29.00 per hour (4 hour minimum) Charge increased by 3.5%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 2, Government Service or
Product.
51 Convention and Cultural
Services
Community
Center 120 Volt Electrical Outlet Modify $95.00 per day 20 amps
$100.00 per day
20 amps
Charge increased by 5.2%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
52 Convention and Cultural
Services
Community
Center 208v Single Phase Modify $265.00 per day
60 amps or 6 h.p.
$278.00 per day 60
amps or 6 h.p.

Charge increased by 4.9%, within industry
standard cost ranges.

This charge is not a tax under Proposition 26, as it
falls under Exception 4, use of City property.
53 Convention and Cultural
Services
Community
Center 208v Single Phase Modify $360.00 per day
100 amps or 6 h.p.
$378.00 per day
100 amps or 6 h.p.