City Council Agenda Report
Meeting Date: April 4, 2023
From: Scott Williams, Director of Finance
Department: Finance
Submitted by: Jessica Alcaraz, Financial Services Administrator Subject
General Fee Schedule for Fiscal Year 2023-2024
Recommendation
Adopt Resolution No. 2023-04 authorizing and adopting the General Fee Schedule for Fiscal Year 2023-2024.
Background
The City provides services for a fee to individuals or businesses at an estimated reasonable cost of providing such services. The fee calculation considers the cost for efficient and effective delivery of services by City resources. Fees that do not recover the full cost of service result in a subsidy which may impact funding and the City's ability to address various community needs.
Examples of City fees include building permits, development permits, and health and environmental control services.
As part of the annual budget process, the City's General Fee Schedule is reviewed to ensure that the fees are set in accordance with applicable federal and state laws. City departments review fees for services and make recommendations to add and/or delete fees, or make changes to existing fees. In coordination with departments, Finance reviews the changes submitted, and prepares a draft fee schedule for presentation to the Business Industry Commission (BIC), City Council, and members of the community.
On March 15, 2023, Staff presented the proposed General Fee Schedule for FY 2023-24 to the BIC. Staff does not propose fee increases for Fiscal Year (FY) 2023-24, as a comprehensive cost allocation study is needed to determine appropriate fees. Current updates to the schedule consist of one Government Code Section change and non-substantive administrative edits which are highlighted in Attachment 2.
The City last contracted a third-party consultant to conduct a comprehensive cost allocation study in preparation for the FY 2020-21 General Fee Schedule. At the time, the findings of the cost allocation study were incorporated into a proposed General Fee Schedule for FY 2020-21 and presented to the BIC, to the community at a town hall meeting, and to the City Council. On May 19, 2020, the City Council opted to postpone any fee adjustments due to the unpredictable financial impacts impeding businesses during the COVID-19 state of emergency and directed staff to re-evaluate possible modifications in FY 2021-22. Now that the COVID-19 state of emergency was ended by Governor Newsom on February 28, 2023, City staff will begin the selection process of a third- party consultant for a comprehensive cost allocation study to present to the BIC, community and City Council for evaluation and possible adoption for FY 2024-25.
The objective of a cost-of-service study is to recover the full cost of service for most of the feerelated services and activities identified on the General Fee Schedule. Recovering the costs of the provided fee-related services increases the availability of General Fund revenues to be used for services and activities available to all residents and the business community, such as public works and public safety services. Additionally, results will help to ensure that the City meets the service level expectations of the community by collecting revenues to adequately fund the services provided by each department.
Pursuant to Government Code Section 66014, on March 16, 2023 and March 23, 2023, the public hearing notice was posted at City Hall and on the City’s website, and published in the Huntington Park Bulletin (Attachment 3).
Fiscal Impact
Anticipated revenues from fees collected, which include approximately $839,500 from Charges for Services and $2,114,000 from Licenses and Permits, will be included in the City’s projected budget for FY 2023-24.
Attachments
1. Resolution No. 2023-04
2. General Fee Schedule with Changes Highlighted
3. Notice of Public Hearing