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HomeMy WebLinkAboutStaff Report 6.A 09/14/2015DATE: September 14, 2015 Agenda Item #6.A TO: Honorable Mayor and Members of the City Council through City Manager FROM: William Mushallo, Finance Directo Corey Garberolio, Principal Finance Analy - SUBJECT: Public Hearing on changes and updates related to the Master Fee Schedule and a Resolution establishing a schedule of fees and charges for City services RECOMMENDATION It is recommended that the City Council hold a Public Hearing on proposed changes to the Master Fee Schedule to implement the recommendations of the Cost of Services Study (Fee Study), take public input, provide direction to staff as appropriate, and adopt a Resolution establishing a schedule of fees and charges for City services and repealing previously adopted fees and charges for such services. BACKGROUND The City contracted with Willdan Financial Services to perform a Comprehensive User Fee Study provided as Exhibit B to the attached resolution. This project was completed in accordance with the City Council's Goal to Achieve Fiscal Stability and Maintain Financial Sustainability. This is the second part of the cost allocation plan/user fee update initiative. User fees are typically updated every 3 -5 years and the last time they were updated was in 2010. There were several goals established during this update which include- • Providing equitable, defensible and accurate calculations • Develop an updateable model for use in future fee updates • Combine and centralize fees where possible • Make a fee schedule that is easy to access, understand and use • Identify new fees where appropriate • Streamline the fee update process and develop a process for annual changes or additions DISCUSSION The Fee Study reviewed the City's fees and made recommendations based upon the costs identified in the FY 2014 -15 budget. The study concluded that certain fees needed to be increased to recover'costs, while other fees were determined to be adequate. There are also new fees identified that are proposed and set at levels designed to recover the costs of providing the service. The fee model includes updated billable hourly rates, a billable hour's formula and updated direct and indirect overhead. The time associated with providing the service was calculated to determine the cost of the service. Market rates were calculated where applicable and used for equipment and building rental rates. A presentation on this study was made by City Staff and Willdan Financial Services at the July 27, 2015 fee workshop. All feedback received at the workshop is reflected in the revised fee schedule, if applicable, and is discussed below for further clarification. Updates to Fee Schedule- Based on Council feedback the fee for Renewal of the Resident Photo ID Golf Card has been increased from $6 to $10. This still places the fee below full cost recovery. Questions and Comments- Electrocardiogram (EKG) Fee — Through the consolidation of EMS fees, the EKG fee has been updated to include both the cost of supplies and personnel cost and time inputs. This fee was previously comprised of only the cost of supplies. Synthetic Turf Fees- A per field daily rate is proposed in order to promote tournament activity. The rate recognizes the economic benefit of bringing teams to Petaluma to participate in tournament play, and provides a discount from the hourly rate for a full days use. It is not uncommon for a tournament day to include activity from 9:00 AM until 9:00 PM, thus a 12 hour timeframe is proposed as the daily rate. If the tournament requires hours beyond 12 in a day, the hourly rate would be applied for additional hours. If a tournament host requires less than 12 hours per day, the host could choose to pay a daily or hourly rate, with the break -even point in either rate category at about 8 hours. A survey of nearby and regional jurisdictions was completed and the results below include only those jurisdictions who operate and rent synthetic turf fields. Local and Regional Synthetic Field Rates AGENCY HOURLY RATE DAILY RATE LIGHTS RESIDENT ` NON - 'RESIDENT RESIDENT NON - RESIDENT' Petaluma Proposed $68 hr $103 hr $550 - 12 hrs $800 - 12 hrs $29 /hr St. Vincents HS N/A $75 - hr N/A * $900 - 12 hrs Rancho Cotati HS Stadium N/A $502 - 2 hrs N/A $1487 - 8hrs Roseville Parks N/A $100 - hr N/A $1,080 $25 /hr Marin Academy N/A $50 - hr N/A * $600 - 12hr Terra Linda HS N/A $75 - hr * $900 - 12hrs *Hourly rates converted to 12 hour use for comparitive purposes - Of survey results, Petaluma, Rancho and Roseville have daily rates N With respect to the rates in general, Petaluma is the only jurisdiction with, or in this case proposing, a resident versus non - resident rate. The City Council is encouraged to approve the resident and non - resident structure, in recognition that the synthetic turf fields in Petaluma were constructed with, and are operated from, revenues generated locally. The resident rate structure, which is less than non - resident, recognizes such. In review of hourly rates, if Rancho Cotati High School, whose fees are based on the infrastructure available, including that it is a secure stadium, with stadium seating and includes ticket booths and a press box is removed from the comparison, the Petaluma hourly proposal for the resident rate is in the lower to mid —range when compared to the other jurisdictions. It is $7 per hour less than the local entity with similar space, St. Vincent's. When the non - resident rate is applied, Petaluma is the highest, by $3 per hour over the Roseville hourly rate, and $28 per hour over the local entity with similar facilities. When examining the proposed daily rate, the daily Resident fee is the lowest of those jurisdictions responding, and within $50 of the next lowest, Marin Academy. When the non - resident rate is compared, the Petaluma rate is low middle, $200 per day /field above the next lowest, and $100 per day /field less than the next two. It appears as though the non - resident fee is appropriately proposed. There can be a good argument made that the resident fee is set moderately low, however it is recommended that the proposed fee be approved, and that staff conduct further evaluation as the season progresses and more experience is gained in operating the new site. The item can return for further consideration if that appears necessary. During the workshop, the City Council also had a question about any relationship between the daily fee discussed above and the per season fee (private ball field rental - long term) that is paid by organizations such as Petaluma Little League and Girls Softball, Petaluma Youth Soccer and Petaluma Youth Lacrosse. There is not a relationship between the fees. The season fee is assessed per participant and covers an organization's annual or seasonal field use, including use of multiple venues, synthetic and natural, up to 7 days per week, for an entire season of play. The daily fee is for the use of 1 field, for 1 day. • Marina Liveaboard Fee — The Liveaboard fee is included in the master fee schedule however the fee is in suspense pending approval by the State Lands Commission to authorize liveaboards at the Petaluma Marina. Outreach has begun and will continue. • Airport Fees- Airport rates have been analyzed and are slightly increasing overall by 1.06 %. This increase is due to standardizing the rates across the different building/hanger categories. While most fees are changing, Ground Leases for commercial and private hanger and commercial use of box hangers will not be affected because these fees are tied to individual contracts that will go to Council for action. The Airport Commission is aware of the proposed fee adjustments. They do not recommend annual increases by the Consumer Price Index (CPI) and feel strongly the rates should be reviewed periodically and changed only for financial needs or to remain competitive within the market. The Fee modifications and /or increases vary across departments depending on department direct and indirect overhead, salary and benefit costs and the staff time associated with providing the service. Fees with increases of more than 100% are generally due to these factors. For example the Police Special Event Permit Fee (Minor), Dispatch Recordings on Digital Media, Digital Media and Photos on DVD, CAD Incident, Building Other Inspection and EKG fees are all fees increased by more than 100% due to an increase in estimated time to provide the service as well as an increased hourly rate driven from higher benefit costs and department overhead. There have been a few minor adjustments made to the fee schedule since the July 27, 2015 workshop. This includes correcting language on fee descriptions along with categorization and the addition of fees that were inadvertently left out of the initial draft of the proposed fee revisions. Fees added to the schedule after the workshop include fees for the Teeny Tiny Tots Preschool Program and a private rental rate for the Council Chambers. Funding for Teeny Tiny Tots Preschool Program was approved in the FY 15 -16 budget and the program will be fully implemented in the fall. Similar to prior fee resolutions, the proposed resolution provides for annual fee increases at the beginning of each fiscal year, based upon the percentage increase or decrease in the Consumer Price Index (San Francisco, - Oakland -San Jose). As required by law, a Notice of Public Hearing was published on September 3 and September 10 and the proposed changes to the Master Fee Schedule were made available to the public on September 3, 2015. FINANCIAL IMPACTS: The updated fees presented in the User Fee Study will result in an increase to revenue across various funds. General Fund revenue is anticipated to increase annually between $150,000 and $200,000. General Fund revenue increases include fees for Emergency Medical Services, Fire Prevention/Hazmat, Planning, Police, Public Works and Recreation. Non General Fund revenue is anticipated to increase annually between $50,000 and $100,000. Non General Fund revenue increases include fees for Airport, Building, Turning Basin and Marina. These revenue increases will be less in FY 15/16 because updated fees will not go into effect until after the attached resolution is formally adopted. Revenue estimates are based upon prior year activity and can be affected by activity levels, seasonality, and economic factors. ATTACHMENTS 1. Resolution adopting a revised Master Fee Schedule 2. Exhibit A- Master Fee Schedule 3. Exhibit B- Comprehensive User Fee Study Report ATTACHMENT 1 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA, CALIFORNIA, ESTABLISHING A SCHEDULE OF FEES AND CHARGES FOR CITY SERVICES AND REPEALING PREVIOUSLY ADOPTED FEES AND CHARGES FOR SUCH SERVICES WHEREAS, the City Council of the City of Petaluma ( "City ") has previously established fees and charges for City services, with the intent of recovering up to the City's estimated actual and reasonable costs to provide such services; and WHEREAS, with respect to fees and charges to be increased, the City has analyzed its fees and charges, the costs of providing services, the beneficiaries of the services, and the revenues produced by those paying charges for such services, and such analysis is contained in the Cost of Services Study ( "Study "), which applicable portion of the Study is included in the Master Fee Schedule attached as Exhibit A to this resolution and which entire Study is hereby incorporated by reference; and WHEREAS, a Comprehensive User Fee Study Report is attached as Exhibit B; and WHEREAS, the City wishes to comply with both the letter and the spirit of Article XIIIB of the California Constitution; and WHEREAS, in adopting the fees and charges for City services as set forth in this Resolution, the City Council of the City of Petaluma is exercising its powers under Article XI, Sections 5 and 7 of the California Constitution, Section 66014 of the California Government Code, and other applicable law; and WHEREAS, the City has a policy of recovering up to the full cost of providing voluntary services from those persons utilizing them so that general taxes are not diverted from general services to unfairly or inequitably subsidize such services; and WHEREAS, the fees and charges set forth in the schedule of fees and charges adopted by this Resolution are not taxes as defined in Article XIIIA, §3(b) (Proposition 26), of the California Constitution because such fees and charges are either: (1) imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs of conferring the benefit or granting the privilege to the payor; or (2) imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs of providing the service or product to the payor; or (3) imposed for the reasonable regulatory costs incident to issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof, or (4) imposed for entrance to or use of city property, or the purchase, rental, or lease of city property, except charges governed by Section 15 of Article XI; and WHEREAS, the fees and charges set forth in the schedule of fees and charges adopted by this Resolution are consistent with the requirements of Article XIII D (Proposition 218) of the California Constitution pursuant to Apartment Association of Los Angeles County v. City of Los Angeles (2001) 24 Cal. 4th 830, in that such fees are not applicable to incidents of property ownership, but rather actual use of City services; and WHEREAS, in accordance with Government Code Section 50076, fees and charges that do not exceed the reasonable cost of providing the service or regulatory activity for which the fees are charged and which are not levied for general revenue purposes are not special taxes as defined in Article 3.5 of the Government Code; and WHEREAS, in accordance with Government Code Section 66014, local agency fees for: zoning variances, use permits, building inspections, building permits, filing and processing applications and petitions filed with the local agency formation commission or conducting proceedings filed under the Cortese -Knox Local Government Reorganization Act of 1985 (Government Code § 56000 et seq. ), processing maps under the Subdivision Map Act (Government Code § 66410 et seq.), or planning services shall not exceed the estimated reasonable cost of providing the service for which the fee is charged; and WHEREAS, in accordance with Government Code Section 65104, fees to support the work of planning agencies shall not exceed the reasonable cost of providing the service for which the fee is charged; and WHEREAS, in accordance with Government Code Section 65456, legislative bodies may, after adopting a specific plan, impose a specific plan fee upon persons seeking governmental approvals which are required to be consistent with the specific plan, and such fees shall, in the aggregate, defray but not exceed the cost of preparation, adoption and administration of the specific plan; and WHEREAS, in accordance with Government Code Section 65909.5, reasonable city fees for the processing of use permits, zone variances, or zone changes shall not exceed the amount reasonably required to administer the processing of such permits, zone variances or changes; and WHEREAS, in accordance with Government Code Section 66451.2, reasonable local agency fees for the processing of tentative, final and parcel maps shall not exceed the amount reasonably required by the agency; and WHEREAS, in accordance with Health and Safety Code Section 17951, city governing bodies may prescribe fees for permits, certificates or other documents required or authorized concerning implementation and enforcement of the California Building Standards Code, and such fees shall not exceed the amount reasonably required to administer or process those permits, certificates or other forms or documents, and shall not be levied for general revenue purposes; and WHEREAS, in accordance with Health and Safety Code Section 19132.3, city governing bodies may adopt fees for filing building permit applications, and such fees shall not exceed the amount reasonably required for the local enforcement agency to issue such permits, and shall not be levied for general revenue purposes; and WHEREAS, in accordance with Health and Safety Code Section 19852, city governing bodies may prescribe such fees as will pay the expenses incurred by the building department in maintaining the official copy of the plans of buildings for which building permits have been issued, but such fees shall not exceed the amount reasonably required in maintaining the official copy of the plans for which building permits have been issued; and WHEREAS, fees adopted pursuant to Government Code Sections 66014, 65104, 65456, 65909.5, and 66451.2, and Health and Safety Code Sections 17951, 19132.3, and 19852, are to be imposed pursuant to Section 66016 of the Government Code, which imposes certain procedural requirements prior to levying a new fee or service charge, or prior to approving an increase in an existing fee or service charge; and WHEREAS, in accordance with the Government Code Section 66016, the, cost analysis and support for a fee or service charge which will be increased pursuant to this Resolution was available for public review and comment for ten days prior to the public hearing at which this Resolution was adopted; and WHEREAS, in accordance with California Government Code Section 66016, at least 14 days prior to the public hearing at which the City Council first considered adoption of the fees established by this Resolution, notice of the time and place of the hearing was mailed to eligible interested parties who files written requests with the City for mailed notice of meetings on new or increased fees or service charges; and WHEREAS, 10 days advance notice of the public hearing at which this Resolution was adopted was given by publication in accordance with Section 6062a of the Government Code; and; WHEREAS, it is the intention of the City Council to adopt a schedule of fees and charges, which updates certain existing fees and charges, and /or establishes certain new fees and charges based on the City's budgeted and projected costs of services; and WHEREAS, the schedule of fees and the total amounts thereof, described in Exhibit "A" attached, are hereby determined to be reasonable in that the amounts thereof do not exceed of the estimated reasonable costs of providing the services for which the charges and fees are made, as reflected in Exhibit A; NOW THEREFORE, the City Council of the City of Petaluma resolves as follows: Section 1. Findings. The following findings are true and correct and adopted as the findings of the City Council: A. The purpose of the fees and charges set forth in Exhibit "A" of this Resolution is to recover up to the full, lawfully recoverable costs incurred by the City in providing various City services, and such fees and charges not levied for general revenue purposes. B. After consideration of the data and information regarding the costs of providing services relating to all fees and charges subject to this Resolution, including the Study, all testimony received orally or in writing at or before the noticed public hearing, the agenda report and the background documents to the agenda report (together, "Record "), the City Council of the City of Petaluma approves and adopts the cost analysis contained in the Study and attached as Exhibit A. C. Adoption of the fees and charges set forth in Exhibit "A" of this Resolution is intended to recover costs necessary to maintain such services within the City within existing service areas and is not a "project" within the meaning of the California Environmental Quality Act ( "CEQA ") pursuant to 14 California Code of Regulations ( "CEQA Guidelines ") section 15378(b)(4) (the creation of government funding mechanisms or other government fiscal activities which do not involve any specific commitment to any specific project which may result in a potentially significant impact on the environment); and /or CEQA Guidelines section 15273 (statutory exemption for rates, tolls, fares and charges within an existing service area); and /or CEQA Guidelines section 15061(b)(3) ('common sense' general exception where there is no possibility the activity in question may have a significant effect on the environment). E. The Record establishes that the costs listed in the cost analysis for those fees and charges which are to be increased and /or established as costs incurred by the City in providing City services are reasonable estimates of the cost of providing such services, and that the revisions recommended to existing fees for such services are necessary to recover the reasonable, estimated cost of providing such services. Section 2. Fee Schedule Adoption and Repeal of Prior Inconsistent Fees and Charges. The schedule of fees and charges set forth in Exhibit "A ", of this Resolution, attached hereto and incorporated herein by reference, are hereby directed to be computed by, applied by and collected by the various City departments, for the herein listed services when provided by the City or its designated contractors. Section 3. Separate Fee for Each Process. All fees set by this Resolution are for each identified process; additional fees shall be required for each additional process or service that is requested or required. Where fees are indicated on a per -unit of measurement basis, the fee is for each identified unit or portion thereof within the indicated ranges of such units. Added Fees and Refunds. Where additional fees need to be charged and collected for completed staff work, or where a refund of excess deposited monies is due, and where such charge or refund is ten dollars ($10.00) or less, a charge or refund 1 need not be made, pursuant to California Government Code Sections 29373.1 and 29375.1 and amendments thereto. Deposits Plus Staff Time and Materials. This means that the applicants will be billed for the fall cost of processing the application based on staff time and materials over and above the amount of the deposit. Staff hourly rate shall be fully burdened and be determined by regular work rates established by the City of Petaluma Finance Director for the given fiscal year(s) in which the application is processed. For applications requesting multiple entitlements, the deposit shall be the sum of the individual amounts. The City Manager shall have the authority to modify or waive staff time and material costs when circumstances warrant. Flat Fee Applications. This is an application fee that does not include staff time and materials. Full Cost Recovery Applications. This includes a deposit amount and the actual costs of the staff time and required materials. Section 4. Interpretation. This Resolution may be interpreted by the several City department directors in consultation with the City Manager and, should there be a conflict between two fees, then the lower in dollar amount of the two shall be applied. Section 5. Use of Fee Revenue. The revenues raised by payment of the fees and charges established by this Resolution shall be used to fund the estimated reasonable cost of providing the services for which the fees are charged, and the revenues from such fees and charges shall not be used for general revenue purposes. Section 6. Subsequent Analysis and Revision of the Fees. The fees and charges set herein are adopted and implemented by the City Council in reliance on the Record identified above. The City may continue to conduct further study and analysis to determine whether the fees and charges for City services should be revised. When additional information is available, the City Council may review the fees and charges to determine that the amounts do not exceed the estimated reasonable cost of providing the services for which the fees and charges are charged. Section 7. Annual Adjustment. The fees and charges set forth in Exhibit "A" shall be adjusted by the City Manager on July 1st of every year by the percentage increase or decrease in the Consumer Price Index —All Items Index (San Francisco- Oakland -San Jose). Section 8. Effective Date. This Resolution shall become effective immediately. In accordance with Government Code Section 66017, all new and /or increased fees and charges upon a development project, as defined in Government Code Section 66000, which apply to the filing, accepting, reviewing, approving, or issuing of an application, permit, or entitlement to use shall be effective no sooner than 60 days following the effective date of this Resolution. Those fees and charges upon a development project are identified with an asterisk in the attached Exhibit A. All other new and/or increased fees and charges not subject to Government Code Section 66017 that are set forth in Exhibit A shall become effective immediately. Section 9. Repealer. These fees and charges shall supersede the corresponding fees previously established and adopted by the City Council. All previously adopted and conflicting fees and charges and all Resolutions and other actions of the City Council are hereby repealed to the extent they conflict with the contents of this Resolution. Resolution numbers 2010 -206, 2010 -070 and 2007 -193 are repealed. Section 10. Severability. The individual fees and charges set forth in Exhibit "A" of this Resolution and all portions of this Resolution are severable. Should any of the fees or charges or any portion of this Resolution be adjudged to be invalid and unenforceable by a body of competent jurisdiction, then the remaining fees, charges and/or Resolution portions shall be and continue in full force and effect, except as to those fees, charges, and /or Resolution portions that have been adjudged invalid. The City Council of the City of Petaluma hereby declares that it would have adopted each of the fees and charges set forth in Exhibit "A" of this Resolution, and this Resolution and each section, subsection, clause, sentence, phrase and other portion thereof, irrespective of the fact that one or more of the fees, charges, or sections, subsections, clauses, sentences, phrases or other portions of this Resolution may be held invalid or unconstitutional.