CITY OF SIGNAL HILL
STAFF REPORT
2175 Cherry Avenue • Signal
Hill, California 90755-3799
6/27/2023
AGENDA ITEM
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM: CARLO TOMAINO
CITY MANAGER
BY: SHARON DEL ROSARIO
ADMINISTRATIVE SERVICES OFFICER/FINANCE DIRECTOR
SUBJECT:
PUBLIC HEARING - RESOLUTION AMENDING THE UNIFORM SCHEDULE OF
CITY SERVICE FEES AND CHARGES
Summary:
The City published a notice in the Signal Tribune newspaper per Government Code Section 65091(a) (4) on June 16 and 23, 2023; and posted the notice in accordance with Signal Hill Municipal Code Section 1.08.010 on June 16, 2023.
On May 25, 2023, the City Council reviewed the proposed updates to the City’s Uniform Schedule of Service Fees and Charges as part of the Budget Workshop. Based on the information presented, the City Council directed staff to update existing fees and charges and proceed with a public hearing to consider adoption of the City’s amended Uniform Schedule of Service Fees and Charges. Staff recommends City Council open the public hearing, consider public testimony, and adopt the resolution approving the proposed schedule of city service fees and charges.
Recommendation:
Adopt a resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SIGNAL HILL, CALIFORNIA, AMENDING RESOLUTION NO. 2022-06-6685, AMENDING THE UNIFORM SCHEDULE OF
SERVICE FEES AND CHARGES
Fiscal Impact:
The proposed fees represent the cost for services that are discretionary, meaning that one or more individuals obtain a benefit from the service provided. As such, the fiscal impact will be based on activity levels after the new fees are adopted and implemented, effective September 1, 2023. The proposed Uniform Schedule of Service Fees and Charges does not establish all fees at 100% CITY OF SIGNAL HILL Page 1 of 3 Printed on 6/23/2023
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proposed Uniform Schedule of Service Fees and Charges does not establish all fees at 100% recovery as the City will continue to subsidize some services in accordance with stated goals and desired outcomes.
Strategic Plan Objectives:
Goal No. 1: Ensure long-term fiscal stability.
Objective No. 1.9: Prepare a fee study/cost allocation review.
Background:
As provided for under State law, cities may collect user fees to recover some or all costs incurred in providing a specific discretionary service from which one or more individuals obtain a benefit. A discretionary service is defined as a service where the customer is identifiable and the service is measurable. Examples include building permits, alarm permits, and building plan checks.
State law, including Propositions 26 and 218, sets parameters under which user fees may be established and administered by public agencies. User fees may not exceed the estimated reasonable cost of providing the service for which the fee is charged. As such, fees are set based upon studies that calculate the full cost of providing specific discretionary services, including direct, indirect, and support costs.
The City’s Uniform Schedule of Service Fees and Charges (Fee Schedule) was last comprehensively updated in 2018, after review of a full cost allocation model and comprehensive user fee study conducted by a consultant. As part of the comprehensive update, the City Council focused on three policy considerations in relation to the fees:
· Community-wide vs. private benefit
o The level of cost recovery should consider the community-wide versus private-benefit nature of a service. The use of City funds is appropriate for services that benefit the community as a whole, such as police patrol services. When the service provides a benefit to specific individuals or groups, such as the issuance of building permits, it is common for the individual(s) receiving that benefit to pay for some or all of the cost of that service.
· Consistency with City goals and objectives
o City policies and City Council goals related to the community’s quality of life are important factors when setting cost recovery levels. For example, fee levels can be set to promote city-wide goals, encourage compliance with City regulations (e.g. water heater permits, minor permits but important to ensure safety) or discourage certain actions (e.g. false alarms, which negatively impact law enforcement). · Demand for services
o Increasing the price of some services results in a reduction of demand for those services and vice versa. Full cost recovery has the specific advantage of ensuring that the City is providing services for which there is genuinely a market that is not overstimulated by artificially low prices. Setting fees for services below market which require a City subsidy, may create an artificial demand. Conversely, high cost recovery may CITY OF SIGNAL HILL Page 2 of 3 Printed on 6/23/2023
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a City subsidy, may create an artificial demand. Conversely, high cost recovery may negatively impact lower income groups which can work against public policy outcomes if the services are specifically designed to serve particular groups.
The City Council also made provisions for future updates, including direction to implement annual Consumer Price Index (CPI) based adjustments to all fees to ensure fees keep up with increasing costs, and directing staff to conduct a comprehensive fee study and update on a recurring basis, but no sooner than every five years. This study is currently in progress and estimated to be completed by early 2024.
Analysis:
At the Budget Workshop of May 25, 2023, staff presented the proposed Fee Schedule with the following changes included:
· Application of a half-year 2022 CPI of 6.4% as reported by the U.S. Department of Labor Bureau of Labor Statistics, across all flat fees; and
· Update of certain fees related to Parks, Recreation and Library Services.
Based on the City Council’s direction, staff complied with the necessary legal requirements to prepare for the adoption of updated and amended fees:
· Proposed adjustments are made available to the public no less than 10 days prior to the hearing - part of the May 25, 2023 Budget Workshop
· Two publications of the Public Hearing notice - June 16 and June 23, 2023 · Conduct Public Hearing - June 27, 2023
o Provide advanced notice to any party that requests to be notified of any proposed fee adjustments
· Approved changes take effect no less than 60 days after approval - September 1, 2023 Staff recommends City Council open the public hearing, consider public testimony, and adopt the resolution approving the proposed schedule of city service fees and charges.
Attachments:
A. Public Hearing Coversheet
B. Resolution Amending User Fees
C. Exhibit A to the Resolution
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