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SR-10-23-2012-8CCity Council Meeting: October 23, 2012 Agenda Item: 8_C To: Mayor and City Council From: David Martin, Director of Planning and Community Development Gigi Decavalles- Hughes, Director of Finance Subject: Resolution Revising and Setting Various Development - Related Fees in the Planning and Community Development Department Recommended Action Staff recommends that the City Council: 1) Approve the attached Resolution to amend the current fee schedule for various development and building related services in the Planning and Community Development Department (PCD). 2) Appropriate the budget increases as outlined in the Financial Impacts and Budget Actions section of the report. Executive Summary This report presents information and requests adoption of a new fee to recover approximately 50% of the costs associated with the preparation of the State - required General Plan update; a new fee to recover the costs for review of a shared parking permit application; a new fee to cover costs associated with mailing environmental notices; a new fee to recover costs for in -house preparation of Initial Studies, and a new Green Building Compliance fee. Also recommended are fee increases for preparing Categorical Exemption, and Negative Declaration /Mitigated Negative Declaration reports, Environmental Impact Report (EIR) review for reports where consultant costs are over $175,000 and a fee increase for traffic studies requiring use of the Traffic Demand Forecast Model. The proposed new fees would generate an estimated $637,689 annually. Background State law requires that local agencies use reasonable estimates of their costs when creating or changing user fees. In Spring 2010, the City hired Revenue and Cost 1 Specialists, LLC, to conduct a City -wide fee study which included a review of various development - related fees in the Planning and Community Development Department. On June 15. 2010, the City adopted new fees reflecting the results of the consultant's study. However, since Council adoption, several new planning and building related processes and services have been established, requiring a new study and review of the fees to support these expanded services. Revenue and Costs Specialists, LLC, was hired to review existing and proposed new planning and building related fees. Since the Land Use and Circulation Element (LUCE) adoption in July, 2010, modifications to the City's permit process have occurred in order to respond to community expectation for participation in the development process. Further, the City has worked to improve both the quality and efficiency of the environmental review process. These enhanced services come with internal costs, and a goal of the fee study has been to recoup these costs and ensure that they are covered by developer paid application fees. A fee analysis was completed, which reviewed the time it takes staff to complete the work required on a particular permit and /or service. Fees are recommended based upon an hourly rate, which includes direct and indirect costs. Revenue projections are based on historical data and assume a constant level of development activity. Actual revenues will vary as development fluctuates. In light of the dissolution of the Redevelopment Agency in January 2012, staff has been looking at cost recovery options to protect the General Fund and to avoid possible layoffs. Fee increases recommended by this staff report would result in the retention of three PCD employees who provide services for which the fees are charged. Discussion Based on the analysis provided by Revenue and Costs Specialists, LLC, staff recommends increasing fees for the following permits or services: • Costs associated with the preparation of the General Plan Update. Government Code section 66014(b) authorizes local agency planning and building `a fees to include "the costs reasonably necessary to prepare and revise the plans and policies that a local agency is required to adopt before it can make any necessary findings and determinations." Several other jurisdictions in the State of California collect a development- related fee to help fund the maintenance of their General Plan. Staff recommends a 6.5% increase on development - related fees in the Planning and Community Development Department to recover a portion (approximately 50 %) of the costs associated with the production of the State - required General Plan update. These plan preparation fees would be added to those threshold permits that rely on the LUCE to determine whether the use or entitlement is permitted and would not be added to minor Planning approvals. This new fee will be added to existing development - related fees and spread across 20 years, which is the planning cycle for the LUCE. Staff estimates that additional revenue for the General Plan update would be approximately $380,000 annually, for the next 20 years. • Environmental Review Services. In order to create efficiencies, improve quality, and be cost sensitive to applicants in the preparation and review of environmental documents for projects located in redevelopment areas, the City hired an RDA - funded, Environmental Planner in FY 2010/11. Internal preparation of Class 32 categorical exemptions, negative declarations, and mitigated negative declarations, has resulted in a decreased applicant cost for document preparation and has streamlined review. Since actual review and document preparation time was unknown, the fees adopted in 2008 were estimates of hours and costs. Since filling the Environmental Planner position, the City has a more reliable understanding of hours required for the different environmental assessments. Staff, therefore, asked the fee consultant to evaluate the current environmental fee structure in light of this information to ensure that the full costs associated with these documents are recovered from the applicant. Based on the consultants' review of staff time spent preparing and /or reviewing the various environmental documents, staff recommends the following changes: 0 2.9% increase in application fees for Class32 /Categorical Exemption reports. 0 13.4% application fee increase for preparation of Negative Declaration and Mitigated Negative Declarations. o In -house preparation of Initial Studies. Staff proposes to provide this service in -house at a cost of $7,240 per Initial Study. Currently, Initial Studies are prepared by an outside consultant who is selected and managed by the City and funded by the applicant. o Environmental Impact Report review. Staff recommends a 5% increase for projects where the consultant cost for preparation of the environmental analysis exceeds $175,000. o Traffic Study Review where a Travel Demand Forecast Model run is required. Currently, the City charges 11 % of the Traffic Study fee to review a traffic study. When a run of the Travel Demand Forecast Model is needed, the fee increases from 11 % to 18 %. o EIR Noticing — a new fee of $2,150 to recover the costs of materials for the numerous mailings required by the California Environmental Quality Act (CEQA) for environmental noticing. It is estimated that additional revenue for the new and /or increased environmental fees would be approximately $89,000 per year. • Shared Parking Permit. A new provision was added in the Interim Zoning Ordinance to allow shared parking in the Downtown area only. This is an administrative application which requires extensive review. A new fee of $2,010 is recommended to recover staff costs associated with review of shared parking permit applications. It is estimated that additional revenue for this new fee would be approximately $4,020 per year. • Green Building Compliance Review — This is a new fee to fully recover staff costs for review of green building plan checks. As of January 1, 2011, the City was mandated by the State to enforce the California Green Building Standards Code. Since jurisdictions are entitled to recover fees for enforcement of energy regulations, Building and Safety staff reviewed the amount of time it takes to verify green building features in plan check. The study concluded that the cost of the V time it takes staff for this review equates to approximately 10% of the building plan check fee. The City of Los Angeles also charges a fee for green building verification based on 10% of the building plan check fee. It is estimated that additional revenue for this new fee would be $160,000 annually. A comparison of current and proposed fees can be found in Attachment B Public Outreach The public notice for this hearing was published in accordance with Government Code section 6062a with the first at least 10 days prior to the hearing on October 12, 2012, and the second publication on October 18, 2012, in the Santa Monica Daily Press, and the Study was made available in the Office of the City Clerk. Next Steps The fees mentioned in this staff report shall be effective no sooner than 60 days following adoption of the new fee or increase to an existing fee. 5 Financial Impacts & Budget Actions The proposed rate changes in these development - related fees will increase annual revenues by an estimated total of $637,689. Revenues for FY 2012 -13 are projected to increase by $318,847, since new fees will be in place for half of the fiscal year. Revenue increases for FY 2012 -13 are requested in the following accounts: 01266.401250: $12,266 01266.401470: $ 1,439 01266.401560: $75,160 01267.407240: $ 3,065 01267.408010: $ 500 01267.408030: $ 167 01321.400370: $71,500 01321.400501: $74,750 01321.407940: $80,000 TOTAL: $318,847 Prepared by: Lynn Gonzales, Principal PCD Analyst Approved: [Yavid Martin, Director Planning & Community Development Department Approved: zdi'a — G' i Decava les -Hug Finance Director Forwarded to Council: Rod Gould City Manager Attachments: A) Resolution with Fee Tables B) Fee Increase Comparison Chart 6 ATTACHMENT "A" RESOLUTION AND FEE TABLES ATTACHMENT "B" FEE COMPARISON CHART Attachment B PLANNING AND COMMUNITY DEVELOPMENT FEE INCREASE COMPARISON Permit Type Current Fee Proposed Fee CITY PLANNING: Adjustment $2,620.03 $2,790.33 Admin Approval $5,052.55 $5,380.96 Alcohol Determination $1,102.71 $1,174.39 Alcohol Exemption $1,654.06 $1,761.57 Appeals $406.74 $433.18 ARB Bldg. Color /Materials $1,543.79 $1,644.14 Signs or Landscaping $992.44 $1,056.95 Staff Approval $275.68 $293.60 Certificate of Compliance $1,578.94 $1,681.57 CUP $12,070.14 $12,854.70 Development Agreement - Per Hour Charge $250.31 $266.58 Charged against initial deposit of: $10,000.00 $15,000.00 Design Compatibility Permit $11,077.70 $11,797.75 Development Review $14,275.55 $15,203.46 Fence /Hedge Mod Administrative $243.90 $259.75 Discretionary $236.48 $251.85 Final Map $1,142.26 $1,216.51 Final Inspection Administrative and ARB $496.22 $528.47 Discretionary Permits $992.44 $1,056.94 Sign Permit $132.32 $140.92 Sign Permit (STP) $66.16 $70.46 General Plan Amendment $11,503.39 $12,251.11 Lot Line Adjustment $771.90 $822.07 Minor Outdoor Dining $248.30 $264.44 Multiple Applications $1,543.79 $1,644.14 Occupancy Permit $1,813.95 $1,931.86 Performance Standard Permit $1,543.79 $1,644.14 Permit Extension $275.68 $293.60 Plan Check per plan (first three reviews) $894.30 $952.42 per hour after first three $220.54 $234.87 per hour - revisions, restamping plans, and permit renewals $220.54 $234.87 per hour - plan checks not otherwise classified $220.54 $234.87 Over the Counter $110.27 $117.43 Project in Coastal Zone $275.68 $293.60 Reduced Parking Permit $3,402.95 $3,624.14 Shared Parking Permit (New Fee) $2,010.00 Sign Adjustment $992.44 $1,056.95 Temporary Use Permit $1,007.87 $1,073.38 Tentative Map $3,583.61 $3,816.54 Text Amendment $10,841.77 $11,546.49 Use Permit Application $4,571.72 $4,868.88 Permit Current Fee Fee Antenna $3,831.91 $4,080.98 Variance $3,433.78 $3,656.98 Waiver Parcel Map $2,040.01 $2,172.61 Yard Modification $3,308.12 $3,523.15 Zoning Compliance Letter $906.43 $965.35 Environmental: Class 32 Categorical Exemption $13,873.17 $14,279.00 Negative Declaration /Mitigated Negative Declaration $21,911.90 $24,849.00 Noticing (New Fee) $2,150 Initial Study (New Fee) $7,240.00 Environmental Impact Report 25% of consultant 25% of consultant Parking and Onsite Circulation Design contract up to contract up to 0 -2 Parking Spaces $175,000 $175,000; 30% of 3 -20 Parking Spaces $698.01 consultant 21 -40 Parking Spaces $1,067.42 contract over 41 -100 Parking Spaces $1,396.03 $175,000 Traffic Study Review 11 % of Traffic Study 11 % of Traffic Fee Study Fee, 18% of Traffic Study Fee if Model run is required STRATEGIC AND TRANSPORTATION PLANNING Flat Fee: Flat Fee: Over the Counter Plan Check Standard (2 reviews Maximum) $218.34 $232.53 Each review after 2 $81.60 $86.90 Standard and Complex Plan Check $151.07 $160.89 Parking and Onsite Circulation Design 0 -2 Parking Spaces $452.11 $481.50 3 -20 Parking Spaces $698.01 $743.38 21 -40 Parking Spaces $1,067.42 $1,136.80 41 -100 Parking Spaces $1,396.03 $1,486.77 Each Additional 100 Parking Spaces $369.41 $393.42 Miscellaneous - each hour /fraction thereof Plan Checks - Not otherwise classified $218.34 $232.53 Plan Revisions $218.34 $232.53 Permit Renewals $218.34 $232.53 Excess Plan Check - more than 2 resubmittals $218.34 $232.53 BUILDING AND SAFETY Plan Check: Flat Fee: Flat Fee: A. Architectural and Structural Plan Review 1. Preliminary Review First Two Hours $463.14 $493.24 Each Additional Hour $151.07 $160.89 2. Over The Counter Standard -up to two reviews $347.35 $369.93 Excessive Plan Check- each review over two $151.07 $160.89 3. Formal Plan Review Permit Type Current Fee Proposed Fee Current Proposed Flat Fee: Flat Fee: $ /sq.ft. $ /sq.ft a. New Buildings and Related Accessory Structures One and Two Family Dwellings -main & accessory buildings Excessive Plan Check -each review over three Apartments, Condominiums and Hotels and attached parking Excessive Plan Check -each review over three Additional 5% for 4 stories or more Commercial /Industrial- complete building and attached parking 1"10,000 square feet All square feet over 10,000 Excessive Plan Check- each review over three Additional 5% for 4 stories or more Commercial and Industrial -shell only and attached parking 1" 10,000 square feet All square feet over 10,000 Excessive Plan Check- each review over three Additional 5% for 4 stories or more Commercial Garage Structures.-stand alone structures Excessive Plan Check -each review over three Additional 5% for 4 stories or more b. Alterations and Additions Residential Remodel and Additions -main & accessory bldgs Excessive Plan Check -each review over three Tenant Improvements 0- 10,000 square feet All square feet over 10,000 Excessive Plan Check -each review over three Interior Demolition 0- 10,000 square feet All square feet over 10,000 Inspection Fees: A. Combination Building Permits 1. One and Two Family Dwellings 2. Apartments, Condominiums, Hotels and Assoc. Parking Additional 5% for 4 stories or more 3. Commercial and Industrial - complete building 1st 10,000 square feet All square feet over 10,000 Additional 5% for 4 stories or more 4. Commercial and Industrial - shell only 1st 10,000 square feet All square feet over 10,000 Additional 5% for 4 stories or more 5. Commercial Garge Structures - stand alone structures Additional 5% for 4 stories or more 6. Residential Remodel and Additionas 7. Tenant Improvements 0- 10,000 square feet All square feet over 10,000 8. Interior Demolition $421.23 $448.61 $0.9360 $0.9968 $211.72 $225.48 421.23 $448.61 $0.8037 $0.8559 $211.72 $225.48 $421.23 $448.61 $1.06 $1.13 $0.3019 $0.3215 $211.72 $225.48 $421.23 $448.61 $0.6794 $0.7236 $211.72 $225.48 $421.23 $448.61 $0.6794 $0.7236 $211.72 $225.48 $421.23 $448.61 $1.13 $1.20 $266.86 $284.21 $421.23 $448.61 $0.4529 $0.4823 $0.3775 $0.4020 $266.86 $284.21 $421.23 $448.61 $0.0755 $0.0804 $0.0604 $0.0643 $120.20 $128.01 $1.23 $1.31 $120.20 $128.01 $1.01 $1.08 $120.20 $128.01 $1.23 $1.31 $0.6063 $0.6457 $120.20 $128.01 $0.7716 $0.8217 $120.20 $128.01 $0.7716 $0.8217 $120.20 $128.01 $1.19 $1.27 $120.20 $128.01 $0.3490 $0.3716 $0.2756 $0.2935 Permit 0- 10,000 square feet All square feet over 10,000 Green Building Code Compliance Current Fee Fee Current Flat Fee: Flat Fee: $ /sq.ft. $ /sq.ft $120.20 $128.01 $0.0606 $0.0645 $0.0460 $0.0489 10% of Bldg. Plan (New Fee) Check Fee Reference Resolution No. 10715 (CCS).