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SR-11-A (26) , r f ~ ,j .e e .2// ~t:Jt!/3 . .lAH ~ 6 198.8 Santa Mon~ca, Cal~forn~a FEB 02 1988 11- A 290.// CM:JG city Council Meeting: January 26, 1988 " / !, I. (/ ::) u > TO: Mayor and City Council FROM: City Staff SUBJECT: Recommendation to Approve Increases in Various Current User Fees, to Implement New User Fees, and to Direct the City Attorney to Prepare Necessary Resolutions and Ordinances. INTRODUCTION On November 11, 1986, the City Council authorized the city Manager to negotiate and execute a contract with David M. Griffith and Associates (DMG) to conduct a comprehensive review of all city user fees. DMG completed their review of the full range of user fees charged by the City in October of 1987 and their analysis and recommendations for fee adjustments were outlined for the City council in a study session on November 10, 1987. The following outlines city staff's recommendations regarding appropriate user fee increases based on the results of the DMG review and internal staff discussion. BACKGROUND Increasing numbers of municipalities are engaging in user fee studies in order to determine the extent to which fees charged - 1 - l\-A JM2 i n...~_ ~ _ ,_ ;:.. C; u Ji.~'U JStl ; e e for a service pay for the full cost of providing that service. The philosophy behind user fee studies is that, for special services performed by government which benefit an individual and not the community as a whole, that individual should pay for the full cost of the service. While decision-makers may elect to subsidize the provision of some services, it is important that they understand the full cost of such services in order to make informed decisions regarding the extent to which they wish to subsidize. A user fee study provides detailed information regarding the full cost (direct and indirect) of staff time and materials required to provide individual types of services, compares those costs with the revenues received for those services, and then recommends fee levels based on the service costs, on comparable fees charged by neighboring municipalities, and the socio-economic and cultural objectives of the city. DMG studied the full range of fee-for-service functions provided by both General fund and enterprise fund departments in the city. As a resul t of DMG' s analysis, fee increases and the implementation of new fees are recommended for General fund functions but no increases are recommended for fees charged by enterprise fund operations. The DMG study is attached for reference (Attachment I). In addition, as part of the citywide fee study, the General Services Department used the DMG cost accounting method to assess the full cost of specialized services provided by the Department which, although not technically subject to user fees, do constitute a use of City property for which the 'value' can be - 2 - It e calculated. DMG reviewed both the assessment performed by the General Services Department and their resulting fee increase recommendations, and concurs with the methodology used. The General Services study is available for review should Council wish to do so. DISCUSSION Fee Increase Recommendations Tables I through V outline the fee increases being recommended by staff and provide background information regarding the current level of the fee, the number of units of service type offered annually by the responsible Department, the full cost of providing the service, and the revenue increase which would be generated annually should the City Council elect to adopt the staff recommendation. Reference is also made on the tables regarding the section of the DMG report which provides relevant background information. The following highlights Department-specific issues which should be taken into consideration as the city Council evaluates the fee increase recommendations made by staff. Planning Fees The most significant increases in fees being recommended are in the Planning area, underscoring the fact that such fees have not been revised in several years. In addition to the cost analysis performed by DMG, the results of a survey of planning fees are - 3 - e e highlighted on page 14 of the DMG study. That study demonstrates the extent to which planning fees in other surveyed cities are significantly higher than Santa Monica's. Planning fee recommendations include both adjustments of current fees and the implementation of new fees for services staff currently provide at no charge. Comparisons with other cities revealed that the new fee categories proposed by staff are currently in place throughout the region. In addition, recognizing that significant increases are being recommended for several planning fees currently charged by the City and that developers are often required to pay many of these fees for larger projects, staff would also like to recommend that, in cases where a project is forced to pay multiple fees, 100% of the most expensive fee be charged, while only one-half the amount of the recommended fee amounts would be charged for the remaining services required as part of the project. The Planning Commission was provided with DMGI s planning fee recommendations in December. To date, staff has received no comments from Commissioners. The Commission is expected to discuss the recommendations at their meeting of January 25, and any comments they make will be shared with the city council during discussion of the agenda item on January 26. Police Fees Review of the fees charged by the Police Department revealed that the City is significantly subsidizing services it performs. The recommended fee increases are designed both to more accurately - 4 - e e assess those individuals who use police services for special events (filming, private parties, etc), to force responsible parties to pay for the cost of our accidents, to encourage alarm owners to have faulty alarms repaired in a timely fashion by charging for the true cost of repeated police response to false alarms, and to more accurately assess state and federal agencies for the administrative services they require. Of the eight fees highlighted, four are new fees for services currently provided by the Police Department at no cost. Fire Fees Three new fees are being recommended for the Fire Department, one to cover a portion of the costs for the annual hazardous materials inspection program, and two to cover the costs of annual high rise and routine inspections which are currently performed for specific high rise dwellings, commercial buildings, and institutions as a special service. In addition, an increase in the ambulance transport fee is being proposed to cover a larger proportion of the actual cost of the service. A response fee is also being proposed to partially cover the cost of response which does not result in transport to a medical facility. Recreation Fees Minor increases in swimming pool, tennis, and contract services fees are proposed to more fully cover the direct costs of providing such services to individuals in the community. The - 5 - e e Recreation and Parks Commission approved all of the recommended fee increases at their meeting of December 17, 1987. General Services Fees Increase in plan check and utility cut fees are recommended to reflect the full cost of providing such services to the development community and utility companies. In addition, increases in temporary and indefinite use permits and related services are recommended to more accurately reflect the cost of administrative services involved and the value of city property being utilized. BUDGET/FISCAL IMPACT The recommended fee increases, if adopted by the City Council, would generate additional general fund revenue for the last quarter of FY87-88 as outlined below: community & Economic Development Planning Division $ 125,271 Police $ 81,490 Fire $ 49,153 Recreation & Parks $ 19,797 General Services $ 52,520 General Fund Total $ 328,231 - 6 - e e Following City Council approval of the recommended fee increases and implementation of new fees, appropriate revenue estimate adjustments will be made as part of the mid-year financial report. RECOMMENDATION city staff recommends that the City Council approve the recommended increases in various current user fees, implement the recommended new fees, and direct the City Attorney to prepare the necessary resolutions and ordinances. Prepared by: John Jalili City Manager Julia N. Griffin Senior Management Analyst Attachments: David M. Griffiths User Fee study (feesl) - 7 - e e Ij III <<I III III <<I III III 'lI ~ cQ n:l cQ III '1l ro Lll Lll Lll In In on Lll Lll In ." Lll Lll Lll .... Lt1 Lt1 ...... ...... .... .... .... .... ...... ...... ...... .... ...... 0; 0; ~ 0; '"1 0' 0" 0' 0' 0' 0' 0'1 0'1 0' 0" c- o> 0'1 c- O" tJ'I C' s:: 0.. O. 0- 0- 0- 0- 0- 0.. 0.. 0. 0.. 0- 0. 0. 0.. a. .-l r:l I I I I I . 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'iI; ~ 4 ~CI- ;vu.A.a'?Ja.~,l>rt du<€~~~ ~ "J.- :...rcr; :-f~ ~1tv/~.t~~ C[~iJfl.4~t~~~'p~~~'U L- ~*- It:'Mi.J./A4- ~~,d1,/.;z,'tI.x'/J~{L.'.k/l$.~1 &i::-~t?tP-~ ~~ ;rJ " ,L......,;./ tl,l4-'~~ /'-A.i."-~ 4 --r;;: A:W-"1. t-/.-":' """"" .,"" 'il" , . . A. f/.-1J....tJ-.- ~5?d~. 'Wfl ~ ..4t I-A._k,'< if l~'t.!...""'" ~'if 1'tj,/1!i.1;;::'~ ~ ' :~/f:.~~~~~.-ij;.:td( M~~'P~C.'''<fI~~ ,. - .. e e \ - I ~ II-A: USER FEES: Presented was a staff report recommending the approval of increases in various current user fees, implementing new user fees, and directing the city Attorney to prepare required resolutions and ordinances. Discussion was held. The following members of the public spoke: Joy Fuller in opposition to user fees: Henry Custis, Jack Baptista, and Paul Rosenstein in opposition to implementing fees for Planning appeals. Mayor Conn moved to approve the staff recommendation with the following changes: delete Emergency Medical Response increases (Table III of staff report dated January 26, 1988); delete increase in the youth swimming fee (Table IV): defer fee for Santa Monica College swimming pool (Table IV): modify fees for ci ty Council and Planning Commission appeals to $100 (Table I); and postpone fee increases for utility (street) cuts (Table V). Second by Councilmember Finkel. Mayor Pro Tempore H. Katz moved to amend the motion to make the following changes in the recommended increases (Table I) (in order to pass on the full cost of the services) : Reversion to Acreage, from $700 to $705; Tentative Map, from $900 to $903: Final Map, from $350 to $356: Certificate of AppropriateneSs-Major, from $550 to $557; Certificate of Appropriateness-Minor, from $350 to $352: and Deed Restriction, from $250 to $254. Second by Councilmember Finkel. Discussion was held. The motion on the amendment failed (lack of a majority) by the following vote: Council vote: Affirmative: Councilmembers Finkel, Jennings, and H. Katz Negative: Councilmembers A. Katz, Reed, Mayor Conn Absent: councilmember Zane Councilmember A. Katz moved to amend the motion to retain the current youth swimming course and teen swimming course fees (Table IV) . Second by Councilmember Jennings. During discussion, the maker and second of the amendment included the swim team fees in the motion. The amendment was approved by the following vote: Council vote: Affirmative: Councilmembers, Finkel, Jennings, A. Katz, H. Katz, Reed Negative: Mayor Conn Absent: Councilmember Zane councilmember A. Katz moved an amendment to the main motion to direct staff to return with some details regarding the fees charged for DUI Accident Reports (Table II) (including the policy for refunds in cases where the person is found innocent of charges, and plea bargaining cases). The amendment was accepted as friendly by the maker and second of the motion. The motion to approve the staff recommendation, as amended, was approved by the following vote: CITY COUNCIL MINUTES FEBRUARY 2, 1988 . e council vote: Unanimously approved (6-0) Absent: Councilmember Zane Mayor Conn moved to direct staff to review and bring back a recommendation in regard to Planning Commissioners being able to make appeals at no cost. Second by Councilmember Finkel. The motion was approved by the vote of 5 to 1, Mayor Pro Tempore H. Katz opposed, Councilmember Zane absent. CITY COUNCIL MINUTES FEBRUARY 2, 1988