SR-8-A (22)
1
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CA:RMM:rmtfees
CIty CouncIl Meetlng 5-14-e5
Santa MonIca, CalIfornIa
STAFF REPORT
TO. Mayor and CIty CouncIl
FROM. CIty Attorney and CIty Manager
SUBJECT. OrdInance AddIng SectIon 9367 to the Santa
MonIca MunlcIpal Code to PrOVIde for
ProcessIng Fees for Tenant PartIcIpatIng
ConverSIon ApplIcatIons
INTRODUCTION
On November 6,
1984,
Santa MonIca voters approved
ProposItIon YY amendIng SectIon 2006, ArtIcle XX of the CIty
Charter.
ThIS amendment allows the CIty to set fees for the
processIng
of
Tenant
PartIcIpatIng
Convers I on ( '''fPC'' )
applIcatIons WhICh cover the actual cost of processIng, not to
exceed $500 per unIt.
These fees are to be set by ordInance.
ThIS Staff Report presents the ratIonale for settIng the
proposed fees and processIng cost estImates.
BACKGROUND
ProposItIon X,
the Tenant OwnershIp RIghts Charter
Amendment ("TORCA"), was approved by the voters on June 5,
1984,
and became ArtIcle XX of the Charter of Santa MonIca.
ArtIcle XX allows the converSIon of apartments to condomInIums
through a process whereby the unIts are offered for sale to
the tenants lnhabItIng them.
The converSIon process
IS
1
~4
MAY 1 4 1985
complex, beginnIng wIth
applIcatIon materIals and
explanatIon
IncludIng
and
such
dIstribution of
steps as filIng
appoIntments, public
obJectIons, processIng
notIficatIon, InvestigatIon of
the parcel or subdivIsion maps,
preparatIon of reports and presentatIon to the PlannIng
CommIssIon and CIty CounCIl. The process also Involves reVIew
and coordInatIon by a number of other CIty Departments and
agencies IncludIng the BUIldIng and Safety DIVIsIon, FInance
Department, LIcense DIVISIon, CIty EngIneer, City Attorney,
and Rent Control offIce.
The fIrst TORCA applIcatIon was flIed on September 11,
1984. To date, 14 more applIcatIons have been flIed, brIngIng
the total to 15 applIcatIons contaInIng 106 unIts. The fIrst
applIcatIon was approved by the PlannIng CommISSIon on January
21, 1985. UntIl the new fees are set, the maXImum fIlIng fee
IS $500 per applIcatIon, substantIally less than the costs
Involved In processIng.
BASIS FOR SETTING FEES
USIng documentatIon of actual cost of tIme and materIals
for processIng current applIcatIons, and USIng proJectIons of
tIme and materIals based on hIstorIcal experIence WIth the
range of related plannIng permIts such as SUbdIVISIons, new
condomInIum and converSIon procedures, and related permIt fee
InformatIon from other comparable CItIes, CIty Staff has
estImated actual cost of processIng an average applIcatIon to
be $430 per unIt. A complete breakdown of tIme, task, and
2
cost
IS attached as ExhIbIt A and IS summarIzed In the next
sectIon of thIS Staff Report.
CONSIDERATIONS IN SETTING FEES
CalIfornIa
planning
related
Government Code SectIon 54990 requIres that
fees should not exceed the estImated
reasonable cost of provIdIng the serVIce for WhICh the fee IS
charged.
The actual cost of proceSSIng a TORCA applIcatIon was
evaluated In terms of effICIencIes achIeved per unIt when
proceSSIng large buildIng applIcatIons and In terms of eqUIty
In regard to burden of payment to recover costs on varIOUS
sIzed proJects.
Even though the TORCA legIslatIon now permIts fees up to
$500 per unIt, It IS not the IntentIon of CIty Staff to
recommend eIther exceSSIve fees ($500 per unIt on a 100 unIt
bUIldIng would result In a $50,000 permIt fee) or to burden
small bUIldIng owners WIth the full cost of proceSSIng, whIle
placIng a dIsproportIonately lIghter burden on larger bUIldIng
owners. Therefore, the fee structure proposed below IS based
on the follOWIng conSIderatIons. FIrst, It IS CIty Staff's
IntentIon to recover costs of proceSSIng applIcatIons to the
extent pOSSIble. Secondly, SInce the cost of proceSSIng an
applIcatIon IS not dIrectly proportIonal to the number of
unIts Involved, staff has estImated the Incremental costs of
proceSSIng larger proJects. The costs Increase
proportIonately WIth the number of unIts In the area of Tasks
3
1-8 lExhlblt AJ particularly. Therefore, the fees proposed
for each unIt of bUIldIng SIze over the 6 and under category
Increase In rounded Increments of 5%. For bUIldings of 20
units and over staff proposes a flat fee or the cost of tIme
and materIals whIchever
IS greater,
In order
to recover
unantICIpated costs assocIated WIth large proJects.
ASSUMPTIONS
Fee revenue estImates assume 40 applIcatIons per year
for bUIldIngs of varIOUS SIzes but predomInately In the
categorIes of 10 units or under. Cost and materIals estimates
assume average, relatIvely straIghtforward cases. It should
be noted that proceSSIng costs can escalate rapidly If many
obJectIons are raIsed and reqUIre InspectIons and complaint
follow up. EstImates assume one Planning CommISSIon meetIng
and one CIty CounCIl meetIng. AgaIn, costs may escalate
rapIdly If cases are contInued or reqUIre repeated hearIngs
before the PlannIng CommISSIon In the process of reachIng a
deCISIon. Included In the proceSSIng costs are salarIes,
benefits, admInIstratIon, supplIes and materIals, and publIC
notIfIcation. Overhead IS not Included SInce only a small
portIon of PlannIng and ZonIng or CIty Hall overhead could be
allocated directly to TORCA processing.
PROPOSED FEES AND PROJECTED REVENUES
The tables below show the estImated cost of processlng,
the proposed fee structure, and the prOJected revenue to the
4
City. The projected cost to the City of processing 40
appllcat10ns for bU1lding of variOUS Sizes per year IS
$111J192. Under the proposed fee structureJ proJected annual
revenue for proJects of varYIng SiZes returnIng to the City to
offset those costs 1S $111,192. (See Tables 2 and 3.)
TABLE 1
TORCA Appl1catIon ProcessIng Cost EstImate
(Based on Annual Costs Assum1ng 40 ApplIcatIons,
TypIcal 6 UnIt BUIldIng)
Staff Cost to Process ApplIcatIons
SupplIes and Expenses
Legal AdvertISIng
PrInted Forms
TOTAL ANNUAL COST
Cost Per BUIldIng (dIVIded by 40)
Cost Per Un1t (@ 6 unlts/bldg
$94J560
2,500
3,200
3,000
103,260
2,582
430
5
TABLE 2
TORCA ApplIcatIon Fee Structure
(Assumes that Increases In Cost of ProcessIng of
BUIldIngs Over 6 UnIts Increase by ApproxImately 5% Per UnIt)
BuddIng SIze Proposed Fee Prop YY Allowable Fee
2-6 unIts $430 per unIt $500 per unIt
to exceed $2580
6 $2580 $3000
7 $2709 $3500
8 $2841 $4000
9 $2983 $4500
10 $3132 $5000
11 $3289 $5500
12 $3453 $6000
13 $3626 $6500
14 $3807 $7000
15 $3997 $7500
16 $4197 $8000
17 $4407 $8500
18 $4627 $9000
19 $4858 $9500
20 and over $5100* $lOJOOO
*$5100 or the actual cost of tIme and materIals, whIchever
IS greater, not to exceed $500 per unIt (provIdes means to
recover unantIcIpated costs of processIng large and complex
proJects).
6
TABLE 3
Revenue EstImates
(Assumes 40 ApplIcatIons Per Year for
BUIldIngs of VarIOUS SIzes)
EstImated
Number of BuildIng SIze ProcessIng Fee ProcessIng
ApplIcatIons By UnIt Revenue Cost
12 4 $20,640 $20,640
12 6 $30,960 $30,960
6 10 $18,792 $18,792
4 12 $13,812 $13,812
4 16 $16,788 $16,788
2 20 $10.,200 $10,200
TOTAL $111,192 $111,192
BUDGET AND FISCAL IMPACT
The revenue from the proposed fees wIll offset the cost
to the CIty of processIng TORCA applIcatIons.
The cost of
processIng Includes the full tIme eqUIvalent of an ASSOCIate
Planner and a
.5 FTE clerIcal pOSItIon.
FundIng for these
pOSItIons was allocated by CounCIl actIon In October of 1984
for the remaInder of the fIscal year 1964/85.
The PlannIng
and ZonIng DIVISIon WIll request that the Planner and clerIcal
pOSItIons be reauthorIzed for FY 85/86, the cost of WhICh WIll
be covered by fee revenues.
The fIscal
Impact of settIng the fees as proposed IS
POSItIve.
The current fee of $500 per applIcatIon for 40
bUIldIngs WIll produce only $20,000 In annual revenue, far
less than the $111,192 antICIpated annual cost.
The prOJected
7
.
1985/86 revenue of $111,192 based on the proposed new fee
structure wIll adequately recover the costs.
(See Table 3.)
PROPOSED ORDINANCE
The accompanYIng ordInance adds SectIon 9367 to the
Santa MonIca MunICIpal Code.
The new sectIon provIdes that
the CIty CouncIl shall establIsh processIng fees for tenant
partIcIpatIng
converSIon
applIcatIons by resolutIon.
A
resolutIon to be adopted by the CIty CouncIl upon adoptIon of
the ordInance also accompanIes thIS Staff Report.
RECOMMENDATION
It IS respectfully recommended that the CIty CouncIl
Introduce the accompanYIng ordInance for fIrst readIng.
PREPARED BY:
Robert M. Myers, CIty Attorney
John Jallll) CIty Manager
Paul SIlvern} DIrector of PlannIng
8
Step
1
2
3
4
5
Exhiblt A
Time, Task and Cost Estimates Per TORCA Appllcatlon*
Task
Explanatlon of
Procedures.
Assume 4 follow-up
calls from appllcant
prlor to submlttlng
appl1catlon.
Contact: Rent Control,
BU11ding and Safety,
General Services, Flre
Dept. and County Tax
Collectorls Office.
Slte Vlsit
Followup, such as
confer wlth super-
Vlsor or wlth Clty
Attorney's offlce or
research flIes.
Staff
Level
Planner
Staff III
Clerical
Planner
Planner
Admin. Analyst
Staff III
Sr. Admin. An.
BattjChlef
Planner
Planner
Div. Mgr.
City Attorney
Confer with appllcant Planner
at appllcatlon sub-
mlttal. Log In and
provlde receipt. Pre-
Ilmlnary check for
completeness. Clerlcal
make up flle, data
entry. Clerlcal
Followup
Fee recelpt
Flle reVlew. Work wlth
applicant to obtaln
completeness.
Supervlsory
Div. Mgr.
Clerical
Flscal Staff
Planner
Planner
Div. Mgr.
Bootleg unlt-Part1cl- Planner
pate on bootleg com-
mittee. Plan check for Planner
bUl1ding permlt.
- 1 -
Hours & Cost
Per Hr.
1
1.5
1.5
.5
.5
.25
.25
1
1
1
1
1 @
.5 @ $13.63
@ 9.33
13.63
@ $13.63
@ 12.35
@ 9.33
@ 15.31
@ 20.45
@ 13.63
@ 13.63
@ 17.94
@ 25.00
1.5 @
13.63
.5 @
1. 5 @
13.63
13.63
9.33
.5 @ 17.94
.5 @ 9.33
.5 @ 8.87
2 @
1 @
13.63
13.63
1.5 @
17.94
2
@ 13.63
1
@ 13.63
* Assumes Typical 6 Un~t Bu~ld~ng
6 Notlce of appllcation Cler~cal 2 @ 9.33
to tenants. Planner .5 @ 13.63
7 Ob]ectlons - Phone Cler1cal .5 @ 9.33
calls. Planner 1 @ 13.63
8 Receive wrltten Planner .5 @ 13.63
obJections. Invest~-
gate complaints.
Fire .5 @ 20.45
Bu~lding & SaL .5 @ 20.69
Attorney .5 @ 25.00
Cler~cal .5 @ 9.33
Make f~le on complaints Planner .5 @ 13.63
& log agents l.nVest- Clerlcal 1 @ 9.33
igatlng them. Prepare
report on find~ngs.
D~v. Mgr. & Planner Planner 2 @ 13.63
meet to determlne act- D~v. Mgr. 1.5 @ 17.94
ion. Wr1te staff
report on resolutlon. Clerlcal 1 @ 9.33
9 Tentatlve Map, log Planner 1 @ 13.63
in, prelim check, set Cler~cal .5 9.33
up new flle.
Tentatlve Map reVlew Englneer 2 @ 15.32
10 Determlne completeness. Planner 6 @ 13.63
Accept for fl1ing. Anal-
ys~s and coordinatlon
w~th General SerVlces
1n map checklng.
Superv~sor review. Div. Mgr. 1 @ 17.94
Final Hap Eng~neer 3 @ 15.32
11 Set for public hearing Cler~cal 3 @ 9.33
Not1fication.
l2 Staff report Planner 4 @ 13.63
Clerical Cler~cal 2 @ 9.33
Supervlsor Div. Mgr. 2 @ 17.94
Dir. Plan. 1 @ 22.94
13 Publ~c Hrg. Planner 1 @ 13.63
D1V Mgr. 2 @ 17.94
D1.r. Plan. 1 @ 22.94
Cler1.cal 4 1 @ 10.61
14 If Denied, poss1.ble Planner 5 @ 13.63
Appeal to City Clerlcal 5 @ 9.33
Counel.l. (repeat Clerl.cal IV 1 @ 10.61
- 2 -
steps II, 12, 13 above) D1V. Mgr.
D1r. Plan.
15
If approved fol1ow-
up wlth other
Boards (e.g. ARB),
Clty Attorney, (CC
& R's,) Engineering
(map) and Finance,
(fees paid). Minutes
& data Entry & fl1lng.
16
F1nal Map Staff
Report to Council
(same as 12)
17
Follow up data
entry files
18
Contingency for
problem areas (memos
to Clty Attorney;
addltlona1 meetings
wlth applicant and/or
D1rector of Plannlng;
Revision of forms; work
with data processlng.
Informat1on and problem
solvlng: Phone calls;
Data entry.)
- 3 -
Planner
Attorney
L1c/Permit Sup
Clerical IV
Planner
Clerlcal
D1V. Mgr.
Dlr. PI.
Attend Council
Meeting
Clerlcal
Planner
Planner 8
Dlvision Mgr. 3
Dlr. of Plann1ng 3
Attorney 1
3
2
8 @
2.5 @
1. 5 @
3 @
4
2
2
1
2.5 @
2 @
@ 17.94
@ 22.94
13.63
25.00
13.24
10.61
@ 13.63
@ 9.33
@ 17.94
@ 22.94
9.33
13.63
@
@
@
@
13.63
17.94
22.94
25.00
Total Hours and Cost Per Applicatlon
Planner
57 hrs @
Clerical
23.5 hrs @
Staff IV
5 brs @
D~vision Manager
17 brs @
Dlr. of Plann~ng
8 hr @
C~ty Attorney
5 brs @
Eng~neer
5 brs @
L~c/Perm1.t Sup.
L 5 brs @
Sr. Admin An. (Gen. Ser.)
.S hrs @
Flscal Staff
.5 hr @
Batt. Chf/Flre Marsh
1 hr @
Admln Anal. (Rent Control)
.S hr @
BUlldlng Officer
1 hr @
$13.63/hr.
9.33/hr.
lO.61/br.
17.94/hr.
22.94/hr.
25.00/hr.
lS.32/hr.
13.24/hr.
lS.31/hr.
B.87/hr.
20.45/hr.
12.34/hr.
20.6<;)
30% beneflts
cost per tYPlcal
6 unit bUlld1.ng
- 4 -
$776.91
219.26
53.05
304.98
183.52
125.00
76.60
19.86
7.66
4.44
20.45
6.17
20.69
$1818.59
545.58
$2364.17
CA:RMM:rm93b7
CIty CouncIl MeetIng 5-14-85
Santa Monica, CalIfornIa
ORDINANCE NUMBER
(City CouncIl SerIes)
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA ADDING SECTION 9367
TO THE SANTA MONICA MUNICIPAL CODE TO
PROVIDE FOR PROCESSING FEES FOR TENANT
PARTICIPATING CONVERSION APPLICATIONS
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN
AS FOLLOWS:
SECTION 1.
SectIon 9367 IS added to the Santa Monica
MunICIpal Code to read as follows:
SECTION
9367. Tenant
PartICIpatIng
ConverSIon ProceSSIng
Fees. The CIty CounCil of the CIty of
Santa MonIca shall establIsh and amend
from tIme to tIme processing fees for
tenant
partICIpatIng
converSIon
applIcatIons pursuant to ArtIcle XX of
the CIty Charter.
SECTION 2. Any prOVISIon of the Santa MonIca MunICIpal
Code or appendIces thereto InconSIstent WIth the prOVISIons of
thIS ordInance, to the extent of such InconSIstenCIes and no
further,
IS hereby repealed or modIfIed to that extent
necessary to affect the prOVISIons of thIS ordInance.
1
SECTION
3.
If any sectIon,
subsectIon,
sentence,
clause,
or phrase of thIs ordInance IS for any reason held to
be InvalId or unconstItutIonal by a deCISIon of any court of
competent JurIsdIctIon,
such deCISIon shall not affect the
valIdIty of the remaInIng portIons of the ordInance.
The CIty
CouncIl hereby declare5 that It would have passed thIs
ordInance and each and every sectIon, subsectIon, sentence,
clause, or phrase not declared InvalId or unconstItutIonal
WIthout regard to whether any portIon of the ordInance would
be subsequently declared InvalId or unconstItutIonal
SECTION 4.
The Mayor shall SIgn and the CIty Clerk
shall attest to the passage of thIS ordInance.
The CIty Clerk
shall cause the same to be pUblIshed once In the offICIal
newspaper WIthIn 15 days after ItS adoptIon.
The ordInance
shall become effectIve 30 days from Its adoptIon.
APPROVED AS TO FORM:
n...r1,...../r "'-. ~
ROBERT M. MYERS
CIty Attorney
2
. .
CA:RMM:rm9367r
Clty CouncIl Meetlng
Santa MonIca, CalIfornIa
RESOLUTION NUMBER
(CIty Councll SerIes)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SANTA MONICA ESTABLISHING PROCESSING FEES
FOR TENANT PARTICIPATING CONVERSION APPLICATIONS
WHEREAS,
Santa MonIca MunIcipal Code SectIon 9367
authorIzes the CIty CounCIl to establIsh proceSSIng fees for
applIcatIons
for
tenant partICIpatIng converSIons under
ArtIcle XX of the CIty Charter; and
WHEREAS~ the CIty has conducted a study to determIne the
fees necessary to recover the cost of proceSSIng applIcatIons
for tenant partICIpatIng converSIons,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS:
SECTION 1.
Upon the fIlIng of an applIcatIon far a
tenant partICIpatIng converSIon under ArtIcle XX of the CIty
Charter, the follOWIng nonrefundable proceSSIng fee shall be
paId to the City:
Number of UnIts
Fee
2-6 unIts
$430 per unIt not
to exceed $2580
6
$2580
7
$2709
8
$2841
1
, .
.. .
9
10
11
12
13
14
15
16
17
18
19
20 or more
$2983
$3132
$3289
$3453
$3626
$3807
$3997
$4197
$4407
$4627
$4858
$5100 or the actual cost of
processIng tIme and materIals
whIchever IS greater, not to
exceed $500 per unIt.
SECTION 2. The CIty Clerk shall certIfy to the adoptIon
of thIS ResolutIon, and thenceforth and thereafter the same
shall be In full force and effect
APPROVED AS TO FORM:
ROBERT M. MYERS
CIty Attorney
2