4 I ~ /Zz Sty ~ 2
City Council Meeting ~ April 5, 2022
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The City maintains a Master Fee Schedule identifying
applicable fees for various City services
• Fees are reviewed and updated each year
• Cities collect fees and charges for government
services performed at the request of, or specifically
for, a particular individual, business, or group... as
opposed to services performed for the community as
a whole
~OS~' NIEETIN~ 11iIgTERIAI~
1 • Communities primarily use tax revenues to fund
services that provide general (community-wide) benefit. a Public works
• Public safety
a~' •Park maintenance
Communities use fees and charges (direct recovery) to
fund services that provide direct benefit.
a Plan Review
• Permitting
• Inspection
Building Fees -construction permit processing,
plan check, and inspection
Planning Fees -such as entitlement review
and review for compliance with zoning code
Engineering Fees -such as engineering
encroachment, and excavation review anc(
inspection
Fire Prevention Fees -such as fire alarm, fire
sprinkler, and construction review for compliance
with Fire Code
~~ Non-Development Related Fees —such as
recreation fees, licensing, and permitting
Fees proposed are not taxes, as defined by
Article 13C of the California State Constitution
Fees are set in accordance with parameters set
by Article 13C and by Section 66014 of the
California Government Code:
Costs allocated to the payer should bear a fair or
reasonable relationship to the payer's burdens on
or benefits received from the governmental
activity
Fees should not exceed the reasonable cost of
providing the service for which the fee is charged
3 User fees must be linked to and not exceed the
estimated reasonable cost of service
The full cost of service sets the maximum limit
of a cost-based fee
Direct program costs for labor, services, and
supplies
Facilities overhead
Departmental administration
Citywide administration and central support
services
Generally, fees from users of one program may not
be used to pay for costs incurred to serve
discounted users or users of a different program
"Full Cost of Service"
The estimated total cost of a program,
inclusive of direct labor, services, and supplies
expenses, and associated overhead expenses
"Cost Recovery"
The amount of a program's full cost of service
that is supported by the program's own fee
revenues
"Subsidy"
The amount of a program's full cost of service
that is supported by other City revenue
sources
0 The cost of service sets
Hourly
Rate for Time
the maximum limit of a Personnel Required Cost of
cost-based fee. It Providing to Perform Service
includes: Services the Service
Direct program costs for
labor, services, and
supplies
Departmental
administration
Citywide administration ~ _ , ~ .
and central support ,„
services _ . ,
ClEAR50UPCE PPESEN TATION TO THE CITY OF SANTA CLARA
Cost Recovery
The amount of a program's
full cost of service that is
supported by the program's ~ ~
own fee revenues
Full Cost
s~bs~dx of Service Revenue
The amount of a program's ~$~ from
full cost of service that is Currentsupported by other Ciry revenue sources Fee ($)
]p CLEAHSOURCE PRESENTATION TO THE CITY OF SANTA CIARA
Exclusively individual benefit
Considerable individual
benefit
Balanced individual and
community benefit
Considerable community
benefit
Mostly community benefit
Entirely community-wide
benefit
e City Council Budget Principle Related to Cost Recovery for Fees ~~With limited exceptions, establish fees based on full cost recovery where individuals/businesses rather than the
community at-large are benefitting from City services.
This preserves limited unrestricted resources for
providing services that benefit the community as a
whole.,'
• :1
erview of Proposed Updates
~ 1~ ~ ~ -
• Over 1,000 Fees Examined
• 87% of Fees are proposed to either decrease, remain unchanged, or reflect only minor adjustments (i.e., up to 10% or $10 change) • ~ 11% of fees are proposed to increase by more than 10%.
Primary drivers of increase are:
• Increases in the costs of equipment and materials recovered via fees • Changes in personnel costs and services/supplies costs • Changes in service requirements
A multi-year phase-in pattern is recommended for more than half of the fees proposed to increase by more than 10%. Immediate adjustment is primarily targeted only for new, discretionary activities. 7 24 New Fees are proposed
Fees linked to enforcement of the California Fire Code
Fees for tree removal permits for non-Heritage trees
( Partial recovery is recommended for Single Family
Residence)
Fees for complying with State legislation affecting City Planning review of development requests
~~ Fees for Zoning Compliance review of specific activity requests
Fees for Review of Requests for Construction Using
Materials and Methods out of alignment with Building Codes 24 New Fees are proposed
Fees for as-needed Code Enforcement Re-Inspections
Fees for Review and Inspection of Facilities Operating
~;,,~ with Fats, Oils, and Greases
Fees for Electric Department Review at Project
Clearance Committee
Fee for Extension of Expiring Encroachment Permits
Fee for hydraulic modeling for new development
~ ' (Development Impact Analysis)
•~• , •,?~
$24.8 MILLION
- --------------------- 100%MAXIMUM
COST RECOVERY
GENERAIFUND
REVENUE
- - ------ 11%ACHIEVED
COST RECOVERY
- ----' 0%MINIMUM
COST RECOVERY
$24.8 MIlL10N
• Parks and Recreation programs are budgeted in the General Fund
• Tax revenue sources in the General Fund which are
collected from the community at-large pay for program costs that are not recovered from user fees
• The General Fund has a projected deficit the City must address through revenue increases and/or expenditure
reduction decisions
• City departments in the General Fund are tasked with
closing the deficit to varying degrees
• Increases in labor, benefit, utility costs, services and supplies, and insurance related costs
• Providing access to facilities and programs that are safe to use and align to community standards (health and safety).
• 10-Year California Minimum Wage increase = 88%
• Utility Expenses for Parks = $1.2M
• Utility Expenses for Pools = $400K
• Limited General Fund Resources (must prioritize spending) 10 Three commissions: Parks &Recreation, Senior
Advisory, and Youth Commissions
Community Survey — 234 Responders
(Commissioners and General Public)
~`~~ Establish a common understanding for evaluating
~`~~ l Parks and Recreation financial needs and user fees Receive Commission and public input on cost
recovery policy afFecting program cost recovery
decisions
COST RECOVERY BENEFIT TIERS
PROGRAM COST RECOVERY
BENEFICIARY TARGETED
11 100%+ indicates minor exceptions where premiums above cost may be justified, such as market-based rentr.
AQUATICS Types of Services
Learn to swim and lifeguarding
Lessons and =Open swim with lifeguards onsite
recreational
swim Types of Users
Youth
Adult
Senior
Types of Services or Access
Senior Center
MEMBERSHIPS • After-School Program
• Activity Pass
Regular access •Community Gardento City facilities
and ongoing Types of Users
programs Youth
Adult
Senior
Persons with Special Needs
1z
FACILITY
RENTALS
Reserved and/or
exclusive
permitted use of
City facilities
AQUATICS
Types of Facilities or Uses
• Aquatics and Athletic Fields
• Meeting Rooms, Party, and Picnic Spaces
Types of Users
Private Groups and Private Individuals
Non-Profit Organizations
Community Groups
• Commercial Organizations
• Competitions and Tournaments ~~j
Surveyed Community Aquatics /Lessons
believes there is e0
~o
Balanced Individual ~
and Community o 60
Benefit av so
Recommended cost
~ ao
recovery range is
41%-70%
aE 30io
i j',
Z 10 ~! 1, ,~' ~
0 ~
Youth Users Adult Users Senior Users
■ Entirely Community Benefit ■Mostly Community 0enefit Considereble Community Benefit Balanced Individual and [ommuNty Bene i ■Considerable Individual Benefit r~ Eadusi~e Individual Benefit 13 RECREATION CLASSES
Surveyed Community
believes there is
Balanced
Individual and
Community
Benefit
• Recommended
cost recovery
range is 41%-
Recreation Classes
so
v ~o
~ 60
0a sov~ ao0v ''~
E Z~
z l0o ''
Youth Users Adult Users
■ Entirely Cammimit Benefit ■Mostly Community Benefit
Balanced Individual and Community Bene it Consldereble Individual Benefit MEMBERSHIPS ~~/3~
Surveyed Community Memberships /Senior Center
believes there is $o
Balanced v 70
I ndividual and 0 60
Community Q
~ 5~
, o
Benefit v 30
• Recommended ~~z
zo
i o ~COSt I"2COVel'V o
r Cll1C~2 IS 41% — Senior Members
7O% ■ Entirely Community Benefit ■Mostly Community Benefit Balanced Individual and Coinmunl[yBene ~ ■Considerable Individual Benefit j 1
Senior Users
Considerable Community Benefit
m Exclusive Individual Benefit
~. Considereble Community Benefit
■ Exclusive Individual benefit
14 MEMBERSHIPS (2/3)
Surveyed Community
believes there is
Balanced
Individual and
Community
Benefit
• Recommended
cost recovery
range is 41%-
70 Memberships /After-School Program
so
~a
°~ fi0
a sov qoov 30 ii - - - --,~-~ i
n
~ ZD
r - ~j r
z ~o ~__ - : i~ -- ~-~o ~_- - _ F
Youth Members
■ EntirelyCommunity Benefit n Mostly Community Benefit ..Considerable Community Benefit BalancedIndividual and Community Benefit Considerable Individual Benefit o Exclusive Individual Benefit M EMBERSHIPS ~3/3~
Surveyed Community
believes there is
Balanced
Individual and
Community
Benefit
• Recommended
cost recovery
ran4e is 41%-
70%
Memberships /Activity Pass
so
~o
v 60
a 50
v~ ao
~,o
v 30= Zo
Z 10
i _~
~ j,0 I ~ i
Youth Users Adult Users
■ Entirely Community Benefit a Mostly Commwiity Benefit Balanced Individual and Community Benefit Considerable Individual Benefit _4 I i
i~
Senior Users
. Considerable Community Benefit
~ Exclusive Individual Benefit
15 FACILITY RENTALS ~i/a~
Surveyed Community
believes there is
Balanced Individual
and Community
Benefit for Non-
Profit Users
• Recommended cost
recovery range is
41%-70%
Hiah Individual
benefit for Private
Grounsand
Commercial Users
• Recommended cost
recovery range is
91%-100%
Facility Rentals /Aquatics
ioo
90 v so
~o
c 60
soo qo
v 30 ~ ' i
a ' ~ ~
z 10
.I ..I ''~ I '1 ,~ ! 1,I
0 Private Groups Non-Pro(it Organizations Commercial Organizations Comp's, Tourneys, Meets ■ Entirely Communit Benefit ■Mostly Community Benefit i ~ Considereble Convnunity benefit Balanced Individual and Community Bene ■Considerable Individual Benefit ■ EMclusive Individual Benefit FACILITY RENTALS ~z/4~
Surveyed Community
believes there is
Balanced individual
and Community
Benefit for Non-
Profit Users
• Recommended cost
recovery range is
41%-70%
Hiuh Individual
benefit for Private
Grounsand
Commercial Users
• Recommended cost
recovery range is
91%-100%
Facility Rentals /Athletic Fields
90 v ao
o ~o
a 60
so
o ao ~
~ 30 'a
Z~z ~0 1~{ `'
~ +
~~ ~1
1 ~1'' 11 ~~~111 ~ ~i''i i i I . ■~ I '
Private Groups Non-Profit Youth Non-ProfitAdul[ Non-Profit Senior Commercial Competitions, Organizations Organizations Organizations Organizations Tournaments ■ Entirel ~~~~y Rai+a~' a MosNy Community benefit ~' C efit BalancedIndividual and CommunityBenefit ■Considerable Individual Benefit ■Exclusive Individual Benefit 16 FACILITY RENTALS ~3~4~
Surveyed Community
believes there is so
~o
Balanced N 60
Individual and o 50
Community ~ 40
Benefit a 3a ~
• Recommended ~z 20 {to ! j ,cost recovery
range ~S T1% — Non~Profit Youth Organizations
7O%
Facility Rentals /Meeting Rooms
11 11Non-Profit Adult Organizations Non-Profit Senior Organizations I,,
~i 11Community Groups
■ Entirel Communit Benefit ■Mostly Community Benefit
Balanced Individual and Community Benefit Considerable Individual Benefit ~. ~. Considerable Community Benefit
■ Exclusive Individual Benefit
FACILITY RENTALS ~4~a~
Surveyed Community
believes there is
Balanced Individual
and Community
Benefit for Non-
Profit Users
• Recommended cost
recovery range is
41%-70%
Hiah Individual
benefit for Private
Groups and
Commercial Users
• Recommended cost
recovery range is
91%-100%
Facility Rentals /Parties and Picnics
l oo
90 y SO
~o0Q 60
so
o ao i
~ 30
E 20
z l0
1~1
~
't1 '~ I~I '' I~~ ' '' 1ktio ~ ~;
Private Individuals Non-Profit Youth Non-Profit Adult Non-Profit Senior Commercial Groups Organizations Organizations Organizations
■ Entirely Community Benefit a Mostty Community Benefit ~: Considerable Community Benefit Balanced Individual and fommunity Benefit ■ConsiderableIndividual8enefit ■Exclusive Individual Benefit 17 COMMUNITY
VALUES
Make a Way for
People to
Participate
Prioritize Santa
Clara Resident
Participation
• 84% of responders support discounted
fees for low-income participants
94% of responders recommended higher
fees for non-resident participants
Community and Individual both benefit
from fee-based recreation
programming. Balanced cost
recovery approach.
USING FEEDBACK TO INFORM POLICY
PROGRAM COST RECOVERY
BENEFICIARY TARGETED
i
100%+indicates minor exceptions where premiums above cost may be justified, such as market-based rents.
USING FEEDBACK TO INFORM POLICY
PROGRAM COST RECOVERY
BENEFICIARY TARGETED
The proposed policy shown on prior slide aligns to survey results
Alternatively, the City Council could provide stafF with greater flexibility in targeting cost recovery where survey results primarily indicated "Balanced Benefit" and
secondarily indicated "Considerable Community Benefit"
Under this approach staff would work within a broader,
20% - 70% cost recovery range for programs with
individual and community benefit
19 100%+ Indicates minor exceptions where premiums above cost may be justifed, such as market-based rents.
Most program fees are managed dynamically by departments as offerings, demand, and other market conditions change seasonally It is impractical for governing bodies to revise and adopt program fees as frequently as programs change through the year
Cost recovery policy for the agency's parks and recreation programs is defined by its governing body (council)
Adopted cost recovery policy creates the boundaries for program fees set and managed by the department on a continual basis j Staff will provide periodic reports to City Council on the efFect ~ of cost recovery levels on participation and revenues and refine the policy over time
Concern for small subsets of vulnerable users
should not drive the placement of program cost
recovery policy impacting all users of the
program
Council can direct policy on lower cost recovery
goals, fee discounts, or fee waivers for defined
users, such as low-income populations
Department establishes practices for identifying
and supporting users targeted by adopted policy
All discounts and fee waivers are subsidized by
the General Fund
20 • Receive City Council Feedback Regarding Cost
Recovery Policy for Parks and Recreation Fee-Based
Programming
• Fee Changes Should Be Considered at the Conclusion
of a Public Hearing
• Public Hearing is Scheduled for April 19, 2022
• If Adopted, Fee Changes Are Proposed to Be Effective
July 1, 2022
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