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Home My WebLink AboutUser Fee Study City of T Comprehensive User Fee Study 1 k Pr de Ink Background • User fees and charges are intended to recover all or a portion of the City's costs for providing a service or access to public property. Examples of city fees include, building permits, recreation classes, facility rentals, etc. • State law requires that the fee not exceed the estimated cost of providing the service . • It is recommended that a comprehensive review of the cost of services and fees be performed every three to five years. The City's user fees and charges have not been reviewed or updated since 2008 . Y!! WILLDAN Scope of the Study • Review and calculate cost of providing services and related fees charged by the following departments and divisions : • City Clerk • Community Development • Economic Development — Building and Planning • Finance/Water Billing • Public Works • Parks and Recreation • Police Services • The Scope of the Study did NOT include taxes, development impact fees, utility rates, etc. W WILLDAN Key Issues Framing This Study Defensible methodology 2 Compliant fee-for-service 3 Reasonable cost of providing services 4 Cost recovery Summary Steps of Data Analysis Building L A L I L �&_ DepaDirect Servic Define the Full Cost of ftm"91"" � or Services Indirect Services Set Cost Recovery Policy Labor Costs Department Overhead Cost Allocation Plan City-Wide overhead NVW I LLDAN 5 Cost of SCalculat *ion Salary & Direct and Fully W"WILL Salary & Productive Burdened Benefits Hours Benefit Indirect Hourly Rate Overhead Rate i Fully Reasonable Full Cost of Burdened Time Hourly Rate Estimate Service DA Fee Cost Compos *it *ion Example • Fully Burdened Hourly rates predominately Permit Tech used to calculate full F Director of cost for feesutility Utility Billing L Services L Clerk • Important to keep in -..MAIO Fee or mind all processes, Service personnel, andL rwc, .y indirect support Meter City involved to calculate Technician Engineer full cost for services L— . L— A .y City Secretary W WILLDAN 7 P01 *icy Cons *iderateions • General standard : individuals or groups who receive private benefit from service should pay 100% of cost • In certain situations, subsidization is an effective public policy tool : • Encourage participation • Ensure compliance when cost is prohibitive to residents • Allow access to services • Recommended that City include an annual inflation factor which will allow City Council by resolution to annually adjust fees based on CPI or other factor W WILLDAN F *iscal Overv*iew Estimated Estimated Annual Estimated Annual Fee Revenue Based Annual Current Fee on • • • Increase Department • RecoveryRevenue City Clerk r 902 11189 w 287 Economic Development 41200 61700 21500 Finance 10,227 33,747 23,520 Parks & Recreation 11249,000 112541441 51441 Community Development — Planning 1871448 203,930 16,482 Community Development — Building 11220,582 11946,018 725,436 Public Works — Engineering 166,097 487,962 321,865 Police 30,536 40,975 10,439 Water Billing Division 51,290 124,038 72,748 Total 21920,282 41099,000 11178,718 Cost Recovery Percentage 55% 77% '�' W I LLDAN CORY Clerk • City Clerk fees are generally associated with administrative services such as providing copies of records. • Recommendation is to set most fees at full cost recovery except for fees limited by California State Law : • 13 fees would remain as currently set • An increase to the Witness Fee per CA Government Code • 2 new fees would be added (Certification Fee & Administrative County Recording Fee) ��ir Estimated Annual Fee Revenue Estimated Annual Estimated Annual Based on Recommended Increase in Fee Current Fee Revenue Recovery Levels Revenue $902 $1,189 $287 -WW I LLDAN Economelc Development • Two Fees Listed : • No change to the Subordination Processing Fee • 1 new penalty would be added for Annual Monitoring Reports that are submitted late Estimated Annual Fee Revenue Estimated Annual Estimated Annual Based on Recommended Increase in Fee Current Fee Revenue Recovery Levels evenue A $4,200 $6,700 $2,500 W I LLDAN F *inance • Finance Department fees generally relate to administrative activities, penalties and special regulatory permits. Business License Taxes were NOT part of the study • Recommendation is to set most fees at full cost recovery except for fees limited by California State Law: • 16 special regulatory permit fees would be increased • 10 fees would remain as currently set • 12 new fees would be added • 1 fee would be decreased MVr'Es`KmTae"WnnuaI Fee Revenue Estimated Annual Estimated Annual Based on Recommended Increase in Fee Current Fee Revenue Recovery Levels Mk. Revenue $10,227 $33,747 $23,520 W I LLDAN Parks and I • Parks and Recreation fees primarily relate to facility rentals and other recreation program services. • Rental fees are generally set based on comparable market rates. • It is generally accepted that Recreation programs provide a measure of public benefit to the community as a whole and are often subsidized . • The recommended fees would result in a decrease in 38 fees, 173 fees would remain unchanged, 6 new fees and an increase in 40 fees. • Overall, the recommended fees would result in department-wide cost recovery of 51.8% (compared to 51 .5% currently) Estimated Annual Based on Recommended Increase in Fee Current Fee Revenue Recovery Levels Revenue $1,249,000 $1,254,441 $5,441 ' W I LLDAN Plann *ing • Planning fees are associated with development related activities to ensure compliance with the Zoning code, the City's General Plan and related development standards. • It is recommended that most Planning fees be set at or near full cost recovery. • The recommended fees would result in an increase to 39 fees, a decrease to 1 fee, 17 fees would remain as currently set and 5 new fees would be added . F -1111r"W Estimated Annual Fee Revenue Estimated Annual Estimated Annual Based on Recommended Increase in Fee Current Fee Revenue Recovery Levels Revenue $187,448 $203,930 $16,482 W I LLDAN Busildeing • Building fees are associated with activities related to enforcing the California Building Standards Code and the Tustin Zoning Code. • It is recommended that most Building fees be set to achieve full cost recovery, including building permit fees that are valuation based . • For fees based on a time based analysis, the recommended fees would result in an increase to 94 fees, 26 fees would remain as currently set, 6 fees would decrease and 23 new fees would be added . Estimated Annual Fee Revenue Estimated Annual Estimated Annual Based on Recommended Increase in Fee Current Fee Revenue Recovery Levels evenue $1,220,582 $1,946,018 $725,436 b WILLDAN Bu *ild *ing Examples SFD Residential . . . 11 Sq . Ft.) City of Tustin City of Tustin ISO City of City of Current Fee Recommended Fee witon Oran a Seal Beach $659 $1,051 $1,094 Commercial Tenant • • - - nts (2,000 Sq . PO ustinFee gel Orang Seal Beach $1,764 . . *Amounts reflect building plan check fees and permit fees. W'WILLDAN Engineering • Engineering fees includes activities related to plan checks, inspections, encroachment permits, small cell sites, contract services, etc. • It is recommended that most Engineering fees be set to achieve full cost recovery. • The recommended fees would result in an increase to 22 fees, 23 fees would remain as currently set, 1 fee would decrease and 6 new fees would be added . M. 7stimated Annual Fee Reve' nue qV Estimated Annual Estimated Annual Based on Recommended Increase in Fee Current Fee Revenue Recovery Levels RevenuK $166,097 $487,962 $321,865 W I LLDAN Engineering Fee Example Jmh� M MML� M M� Curb and Gutter Encroachment Permit Fees A project removing and replacing 50 linear feet of curb and gutter requires on average 5 trips (limits of removal, delineation/traffic control/work zone care, compaction/subgrade, line & grade, etc. . ) for inspection and recording of notes for each trip. Staff estimates the total amount of drive time, time on-site, and time for note taking to be one hour per trip. The fully burden hourly rate for a Sr. Public Works Inspector is $114.56, for a total cost of $572.80. The calculations below demonstrate the fee under both the current and proposed rates. • Current Fee: $0.50/LF = $25.00 ($547.80 subsidy) • Proposed Fee: $550 Flat Fee = $550 ($22.80 subsidy) W WILLDAN • Police fees includes fines and user fees related to activities such as citation sign-off, impounded vehicle release, alarm permits and penalties for excessive false alarms . • It is recommended that most fees be set to achieve full cost recovery. • The recommended fines are based on a survey of 18 cities and are set to deter the related activity. • The recommended fees would result in an increase to 9 fees and 20 fees would remain as currently set. �`Wistimated Annual 11111111111111IF Estimated Annual Fee Revenue P'Estimated Annual Based on Recommended Increase in Fee Current Fee Revenue Recovery Levels RevenU& $30,536 $40,975 $10,439 ; i WILLDAN Water Beillaing • Water Billing fees consists of Water Utility related activities such as new service requests, shutoffs, alternative payment arrangements, etc. • It is recommended that most fees be set to achieve full cost recovery, except for those fees limited by California State Law. • The recommended fees would result in an increase to 9 fees, a decrease to 3 fees, 10 fees would remain as currently set and 3 new fees would be added . �V Estimated Annual Estimated Annual Fee Revenue Estimated Annual Based on Recommended Increase in Fee Current Fee Revenue Recovery Levels Revenu& $51,290 $124,038 $72,748 W I LLDAN Summary Results for Recommended Fees Estimated Annual EstimateclAnnual Estimated Current Cost Recommended Fee Revenue per osts Eligible for Annual Current Recovery Cost Recovery Recommended Department Recovery.., Fee Revenue Percentage Percentage Recovery Level.-.-- City Clerk $2,501 $902 36.1% 47.50/ $1,189 Economic Development $10,292 $4,200 40.8% 65.1% $6,700 Finance $34,119 $10,227 30.0% 98.9% $33,747 Parks & Recreation' $2,423,447 $1,249,000 51.5% 51.8% $1,254,441 Community Development - PlanningZ $203,930 $187,448 91.9% 100.0% $203,930 Community Development - Building $1,946,018 $1,2201582 62.7% 100.0% $1,946,018 Public Works - Engineering $502,336 $166,097 33.1% 97.1% $487,962 Police $51,680 $30,536 59.1% 79.3% $40,975 Water - Billing Division $130,951 $51,290 39.2% 94.7% $124,038 Total $5,305,274 $2,920,282 $4,099,000 i Estimated annual costs include divisions that directly provide fee services (Sports, Classes/Cultural Arts, and Support Services), as well as 10% for indirect support. 2 Many Planning fees utilize deposits and therefore would be 100% cost recovered through time accounting by project. 3 Water Billing Fees have been set at 100% cost recovery except for those that are limited by California State Law (Senate Bill No. 998). W I LLDAN Next Steps ( Proposed T*imel *ine ) • July 11t — Beginning of Public Noticing Process • July 20t" — City Council Public Hearing to Consider Adoption of the Recommended Fees • October 11t — Tentative Effective Date for New Fees (if approved by City Council ) W WILLDAN Questions and A .b 1 �I