SR-211-027
City Council Meeting: November 25, 2003 Santa Monica, California
TO: City Council
FROM: City Staff
SUBJECT: Consideration of Development Related Fees for Systematic Inspection
and Enforcement of Compliance with Conditions of Approval for Certain
Discretionary Planning Permits Related to Commercial Uses
Introduction
This staff report recommends that Council direct staff to establish monitoring fees for
certain discretionary permits in order to fund an ongoing program of periodic proactive
compliance inspections and enforcement.
Background
On October 22, 2002, City Council considered fees for proactive monitoring of new
conditional use and development review permits. Staff recommended implementing an
inspection cycle for restaurants with conditional use permits and projects with design
compatibility or development review permits. As then envisioned, proactive inspections
would occur three times over ten years for conditional use permits and design
compatibility permits and twice in ten years for development review permits. The
proposed one-time fees were $2,100 for new conditional use permits and development
review permits and $1,400 for design compatibility permits. These fees represented the
total estimated cost at present value for the City to provide the service. Council directed
staff to return with additional recommendations and input from the Planning
Commission.
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On December 11, 2002, staff presented options to and asked for recommendations
from the Planning Commission on the types of permits, uses, frequency and duration of
proactive monitoring that should occur. The Planning Commission made the following
recommendations:
1. All commercial sites with new and existing conditional use, development review
and performance standards permits should be monitored.
2. Monitoring should be unannounced but occur quarterly for the first year after
establishing the use and annually thereafter.
3. Costs should be higher for sites with after-hours use that rely on police response
or overtime for code enforcement staff.
4. Monitoring should be adjusted based on the rate of compliance demonstrated by
the permit holder.
On July 8, 2003, staff presented Council with recommended program options and a
proposed fee schedule. Council asked that the proposal be reworked to include an
extended schedule of inspections, providing that if a business showed substantial
compliance, the number of future inspections could be waived. Further, staff was to
return with a proposal for budgeting dedicated enforcement positions, which would not
be filled if current staff resources prove sufficient to conduct the monitoring.
Discussion
Staff proposes to create a flexible monitoring program that starts with annual
inspections of all existing conditional use, development review and performance
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standards permits. Properties that contain violations will be given corrective orders and
scheduled for follow-up inspections. After all properties are inspected, staff will
calendar all sites that contained violations for annual inspections and those sites without
violations for biannual inspections. Additional inspections may be scheduled as needed
to help obtain compliance but will generally be no earlier that six month intervals.
Last fiscal year, staff received 1,821 new code enforcement cases. This workload is
expected to fully engage existing staff capacity and prevent any significant proactive
enforcement without delaying action on or being unable to respond to received citizen
complaints. Staff estimates that a minimum of 500 conditional use, development review
and performance standards permits are in place for commercial uses in the City and
approximately 25 new permits are added annually to this total. To provide proactive
monitoring of existing and new permits according to Council directives, staff estimates
that a minimum of two full time Code Compliance Officers and one Business Assistant
will be required to handle the workload above and beyond existing budgeted staff.
Additional staff may be required if assumptions regarding the number of existing open
permits as well as case closure and compliance rates are underestimated. There is no
question that the growing number of permits to monitor will require periodic additions to
staff indefinitely to sustain proactive monitoring.
Conditions of approval for discretionary planning permits typically require compliance
with the noise ordinance and those conditions would be subject to the proposed
monitoring program. A discussion of noise enforcement other than at scheduled
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proactive monitoring site visits of permittees is addressed in the noise ordinance staff
report also scheduled for Council consideration this evening.
Staff proposes one fee of $500 for the initial monitoring inspection for all permit holders.
A noncompliance fee of $300 would be assessed when additional follow-up work is
required to monitor correction of violations discovered at the initial inspection. This
approach would allow compliant permit holders to avoid fees from unnecessary annual
inspections, while allowing the City to recoup costs of monitoring those with poor
compliance as needed. Fees would be assessed for inspections as they are performed
instead of at the time that fees are paid for the original of original permit issuance.
Budget/Financial Impacts
Annual inspection of an estimated 500 existing permits at a cost to the permit holder of
$500 each would increase general fund revenues $250,000 a year in revenue account
01321.400650. Reinspection fees for an estimated 250 existing permits with violations
at $300 each will further increase revenues in this account $75,000 for a total of
$325,000. If adopted, these fees will become effective in February 2004. The expected
increase in revenue for FY03/04 is $135,400 if proactive enforcement commences.
Annual inspection and noncompliance fees will offset the direct and indirect costs of
proactive enforcement. New direct annual costs of staffing and related supplies,
expenses and capital outlay in the Building and Safety Division for 3.0 additional FTE
(2.0 Code Compliance Officers and 1.0 Business Assistant) is estimated at $260,000
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($195,335 for salaries and fringes, $44,930 in supplies and expenses and $24,870 for
capital outlay). The portion of other previously budgeted indirect costs that are
necessary and related to this program total $65,000. Therefore, total indirect and direct
costs are estimated at $325,000 per year. If program costs begin at midyear, the
estimated impact of new costs for FY 03/04 is $142,435 ($97,668 in salaries and
fringes, $22,465 in supplies and expenses and $24,870 in capital outlay).
Recommendation
Staff recommends that City Council determine whether proactive code enforcement is a
sufficient priority to warrant the increased staffing required and to impose associated
costs on the permit holders, and if so:
1) Conduct a public hearing on the proposed increase in user fees related to
development of commercial uses that are subject to conditional use,
development review or performance standards permits.
2) Accept the attached fee study as a reasonable estimate of the proposed cost of
providing the services outlined.
3) Adopt the attached resolution setting fees for the proactive monitoring of
conditional use, development review and performance standards permits for
commercial uses.
4) Authorize the three new positions as set forth in the Budget/ Financial Impact
section.
Prepared by: Suzanne Frick, Director of Planning and Community Development
Timothy P. McCormick, P.E., Building Officer
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Attachment A: A Resolution Of The City Council Of The City Of Santa Monica Setting
New User Fees In The Planning And Community Development Department Related To
Systematic Inspections And Enforcement Of Compliance With Conditions Of Approval
Of Conditional Use, Development Review And Performance Standards Permits For
Commercial Developments
Attachment B: Estimated Costs And Proposed Fees Related To Systematic Inspections
And Enforcement Of Compliance With Conditions Of Approval For Conditional Use,
Development Review And Performance Standards Permits For Commercial Uses
For above, SEE ADOPTED RESOLUTION NO. 9905 (CCS)
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