User Fees - 2022
1 Agenda
• Project Background
• Overview of User Fees
• Summary Tables by Fee Type
• Sample Project Calculations
• Steps Taken/Feedback Received To Date
• Next Steps
• Comments/Questions
2 Background
• Projects initiated in October 2019
• Cost Allocation Plan
• City-wide User Fee Study
• DIF Study
• Changes since project initiation:
• Significant delays due to the COVID-19 pandemic
• Reorganization & Staffing Changes
3 Examples of Fees and Fines
4 • Fees limited to recovering the cost of providing the service
• Example: Building Permits
Cost Recovery-Based
User Fees
• Some fees are set by Federal or State Law
• Example: Passport Fees
Fees Set by Law
• Certain fees constitute taxes and may not be increased without a vote of the people
• Example: Water Rates
Taxes under Prop. 218
and Prop. 26
• Fines are not subject to cost recovery rules and may
be set by the Council
• Example: Library Fines
Fines
Overview of User Fees
• California cities impose user fees and regulatory fees for services and activities they provide through provisions of the State Constitution • Article XIIIC, Section 1, generally states that a fee may not exceed the reasonable costs of providing the service or performing the activity • The City’s purpose for conducting the user fee study is to ensure that fees do not exceed the costs of service and to provide an opportunity for the City Council to re-align fee amounts with localized cost recovery policies
5 Understand
Full Cost of
Providing
Services
Set
Municipal
Fees
Accordingly
User Fee – Methods of Analysis
• Cost of service analysis – quantitative analysis that compiles the full cost of providing governmental services and activities. • Cost recovery evaluation – compares the existing fee for each service or activity to the average total cost of service quantified through the analysis.
• Fee establishment – recalibrate the fee amount to match the costs of services and to align fees with local policies. 6 Cost of Service Analysis
Example: Personnel Budget $200,000
Operating costs 50,000
Overhead 75,000
Division total costs $325,000
Productive hours
÷2,500
Hourly rate $ 130
Hourly rate $130
Hours required x 4
Total cost to customer $520
7 Salary and
benefits for
staff providing
service
Any related
costs for
office
operations
Related overhead
costs (department
and citywide)
Productive
hours worked
Estimated time
to provide the
service
Maximum Fee Amount
÷
Cost Recovery-Based User Fees
• Fees cannot exceed the cost of providing the service
• Type of fee varies based on fit (flat, tiered based on effort, or deposit-based)
• Degree of cost recovery is a policy decision (Example: Recreation fees are typically subsidized based on community benefit to keep affordable) • Considerations:
Degree of private benefit
Appropriate cost recovery level
Market competitiveness
Size of increase that would result from full cost recovery 8 Cost Recovery – Fee Setting
9 Full Cost of Service(s)
Revenue from Current
Fee (s)
Funding from
increased Fee or
Non-Fee Revenue
Sources
----------------------------------
----------------------------------
----------------------------------
Minimum Cost
Recovery 0%
Current Cost
Recovery Level
Maximum Cost
Recovery 100%
Cost Recovery Analysis-Victorville
10 Annual Estimated
Revenues at Current Fee
Annual Estimated
Revenues at Full Cost
Recovery Fee
Annual Cost Recovery
Deficit
Cost Recovery $4,542,778 $8,846,034 ($4,303,256)
$4,542,778
$8,846,034
($4,303,256)
($6,000,000)
($4,000,000)
($2,000,000)
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
Summary
Tables
11 User Fee – Examined Divisions and Departments
• Planning Department
• Land Development Engineering Division
• Building Department
• Fire Prevention and Community Risk
Reduction Division
• Police Department
• Code Compliance Department and Business
Licensing Services
• Animal Care and Control Division
• Economic Development
• Recreation Division
• Parks Division
• Victorville Municipal Utility Services (VMUS)
• Water & Solid Waste Customer Services
• Water Utility Division
• Finance Department
• City Clerk’s Office
• Library Services
• General Plan Surcharge
• Technology Surcharge
12 Report Summary Table
13 Fee Category Annual Revenues at
Current Fees
Annual Revenues at
Full Cost Recovery
Annual Cost Recovery
(Deficit)/Surplus
Existing Cost
Recovery %
Planning Department 239,254 475,045 (236,791) 50%
Land Development Engineering Division 540,041 1,115,477 (575,436) 48% Building Division 1,422,065 2,427,945 (1,005,880) 59%
Fire Prevention/Community Risk Reduction 71,227 123,751 (52,524) 58% Police Department 43,930 81,777 (37,847) 54%
Code Compliance and Business Licensing Services 734,273 1,334,288 (600,015) 55% Animal Care and Control Division 87,500 280,237 (192,737) 31% Economic Development 3,500 2,267 1,233 154%
Recreation Division 663,972 1,372,904 (708,933) 48%
Victorville Municipal Utility Services (VMUS) 553 7,142 (6,589) 8% Water & Solid Waste Customer Services 5,900 12,711 (6,811) 46% Water Utility Service Fees 555,564 1,009,987 (454,423) 55% General Plan Maintenance Surcharge - 335,848 (335,848) 0% Technology Surcharge 175,000 265,655 (90,655) 66%
Total $4,542,778 $8,846,034 ($4,303,256) 51%
Report Summary Table – Code Compliance and Business Licensing Services 14 Fee Category – Code Compliance Cost of Service per
Activity
Current Fee Existing Cost
Recovery %
Compliance Inspection $95 $35 36%
NOP Filed Activity $286 $33 11%
Invoice Activity Fee $191 $9 5%
Total $572 $77 13%
* Each Code Compliance case will include the three fees listed above * A typical Code Compliance case with no abatement or notice of violation included will require three (3) Compliance Inspections.
Fee Category – Business License Cost of Service per
Activity
Current Fee Existing Cost
Recovery %
In-City New Application – Commercial Business $367 $165 45% In-City New Application – Single Family Residence
Rentals
$335 $165 49%
In-City New Application – Contractors $367 $165 45%
Out-of-City New Application – Contractors $80 $120 151% Report Summary Table – Animal Care and Control Division 15 Fee Category – Animal Control
Enforcement Case
Cost of Service per
Activity
Current Fee Existing Cost
Recovery %
Apprehension Fee – 1st Offense – Unaltered Dog(s) $190 $50 26% Impound Daily Fee $22 $15 69%
State Mandate Fee – Dog with No License (per day) $35 $35 100% License Fee $48 $10 21%
Total $295 $110 37%
* Each Animal Control Enforcement case may include the four fees listed above Fee Category – License Fees Cost of Service per
Activity
Current Fee Existing Cost
Recovery %
License Fee for Altered Dog(s) – 1 year license $48 $10 21% License Fee for Unaltered Dog(s) – 1 year license $48 $25 53% License Fee for Senior Citizens with Altered Dogs – 1
year license
$48 $5 11%
Grooming Parlor Permit Fee $238 $175 74%
Sample
Project
Calculations
16 17
Sample Project: Single Family Home – 2,000 Sq. Ft.
¹ Separate charges for General Review Application, Energy Review Application, and Permit Issuance Fee ² Mechanical, Electrical, and Plumbing
³ Construction Waste Management Plan Review for compliance with CalGreen.
User Fee Category Current Fee Cost of Service
per Activity
Hesperia Fee Fontana Fee
Administrative Charges - - - $1211
Plan Check $750.10 $933 $495 $938
Permit Fee $1,154 $1,521 $1,174 $1,109
M/E/P
2 Review - - - $144
M/E/P Permit $355 - - $216
Sprinkler Review/Permit - - $242 $136
Energy Review/Permit - - - $316
CWMP
3 - - $55 -
Total $2,259.10 $2,454 $1,966 $2,980
18 Sample Project: Office Building – 16,506 Sq. Ft.
¹ Separate charges for General Review Application, Energy Review Application, and Permit Issuance Fee ² Mechanical, Electrical, and Plumbing
³ Construction Waste Management Plan Review for compliance with CalGreen.
User Fee Category Current Fee Cost of Service
per Activity
Hesperia Fee Fontana Fee
Administrative Charges - - - $1611
Plan Check $3,869.78 $3,386.12 $2,153.60 $1,206
Permit Fee $6,031.50 $4,330.24 $5,827.02 $2,293
M/E/P
2 Review - - $3,258.90 $516.14
M/E/P Permit $1,415.24 - $2,841.54 $915.29
CASp Review/Permit - - $480 $815
Energy Review/Permit - - - $448
CWMP
3 - - $165 -
Total $11,316.52 $7,716.36 $14,726.06 $6,354.43
19 Sample Project: 461,241 Sq. Ft. Distribution Warehouse ¹ Separate charges for General Review Application, Energy Review Application, and Permit Issuance Fee ² Mechanical, Electrical, and Plumbing
³ Construction Waste Management Plan Review for compliance with CalGreen.
User Fee Category Current Fee Cost of Service
per Activity
Hesperia Fee Fontana Fee
Administrative Charges - - - $1611
Plan Check $50,574.88 $12,278.82 $45,627.10 $2,815
Permit Fee $77,799.50 $9,404.21 $83,131.97 $7,489
M/E/P
2 Review - - $69,969.15 $11,069.78
M/E/P Permit $4,719.95 - $42,867.69 $22,139.57
CASp Review/Permit - - $768 $1,305
Energy Review/Permit - - - $600
CWMP
3 - - $165 -
Total $133,094.33 $21,683.03 $242,528.91 $45,579.35
Sample Project– Land Development and Engineering
20 Fee Category – EROW Permits – Drive
Approach
Cost of Service per
Activity
Current Fee Existing Cost
Recovery %
Driveway Inspection $301 $97 32%
Issuance $201 $62 31%
Sidewalk Inspection $251 $78 31%
Traffic Control Inspection $75 $34 45%
Tech Fee $40 $13 33%
Total $868 $284 33%
¹ Referenced EROW22-00023
Sample Project– Land Development and Engineering
21 Fee Category – EROW Permits – New
Construction
Cost of Service per
Activity
Current Fee Existing Cost
Recovery %
MS-4 Inspection Fee $553 $267 48%
Construction/Excavation Inspection2 $5,909 $5,663 96%
Improvement Plan Check 2 $5,909 $5,663 96%
ROW Issuance $201 $62 31%
Water Improvement Plan Check 3 $955 $2,451 257%
Water Inspection Permit Fee 3 $1,005 $2,451 244%
Tech Fee $668 $795 119%
Total $15,200 $17,352 114%
¹ Referenced EROW22-00008
2 Project Cost/Value $129,085
3 Project Cost/Value $49,024
Sample Project– Land Development and Engineering
22 Fee Category – EROW Permits –
Subdivision
Cost of Service per
Activity
Current Fee Existing Cost
Recovery %
Monumentation Inspection Fee $603 $246 41%
MS4 Inspection Fee $5,326 $3,332 63%
ROW Issuance $201 $62 31%
Construction/Excavation Inspection2 $97,056 $125,185 129% Improvement Plan Check 2 $23,666 $125,185 529%
Water Improvement Plan Check3 $19,707 $26,590 135%
Water Inspection Permit Fee 3 $53,338 $26,590 50%
Tech Fee $9,195 $7,463 81%
Total $209,092 $314,652 150%
¹ Referenced EROW21-00070
2 Project Cost/Value $4,172,842 (Based on commercial/residential subdivision fee category 26) 3 Project Cost/Value $886,317 (Based on fee category 29) Sample Project – Land Development and Engineering
23 Fee Category – EUTL Permits – Street
Light R/R
Cost of Service per
Activity
Current Fee Existing Cost
Recovery %
Traffic Control Inspection x 2 $150 $67 45%
Sidewalk Inspection $251 $78 31%
Utility Structure Inspection $301 $78 26%
ROW Issuance $201 $61 31%
Tech Fee $43 $13 32%
Total $946 $297 31%
¹ Referenced EUTL22-0154
Sample Project – Land Development and Engineering
24 Fee Category – EWTR Permits –
Backflow
Cost of Service per
Activity
Current Fee Existing Cost
Recovery %
ROW Issuance $201 $61.62 31%
Backflow Test x 2 $366 $132 36%
Water Improvement Plan Check 2 $955 $2,451 257%
Water Inspection Permit Fee 2 $1,005 $2,451 244%
Tech Fee $116 $245 210%
Total $2,463 $5,341 202%
¹ Referenced EROW22-00222
2 Assumed Project Cost/Value $49,024
Steps Taken Prior to Workshop
• Draft studies distributed to stakeholders April 5, 2022 • Draft study posted on City website April 5, 2022
• Stakeholder meeting held on April 13, 2022
• Stakeholder meeting recording posted on City website April 14, 2022 25 Feedback Received
• Delay User Fee Study adoption and implementation
26 Next Steps
• City Council Workshop on User Fee Study – May 9, 2022 • Publish staff recommendations, final study, and Master Fee Schedule – May 27, 2022
• Public Hearing at City Council meeting – June 7, 2022 27 Questions
28