REPORT TO THE CITY COUNCIL
February 13, 2020
FROM: DOUGLAS T. SLOAN, City Attorney
City Attorney’s Office
SUBJECT
Title
Actions pertaining to the 556th Amendment to the Master Fee Schedule:
1. Adopt a finding of statutory exemption pursuant to CEQA Guidelines Section 15273(a) for amendments to Code Enforcement fees.
2. ***RESOLUTION - 556th amendment to the Master Fee Schedule (MFS) Resolution No. 80-420 to add, adjust, revise, or delete various fees for Code Enforcement. (Subject to Mayor’s Veto)
Body
RECOMMENDATION
Staff recommends Council:
1. Adopt the CEQA exemption; and
2. Approve the 556th Amendment to the MFS Resolution 80-420.
EXECUTIVE SUMMARY
The City hired NBS Government Finance Group (NBS) to complete a User Fee Analysis to determine appropriate fees for Code Enforcement activities. Following an analysis of the City’s current fee structure (the Study) and a cost of service analysis of Code Enforcement activities, NBS provided the recommendations set forth in the attached Final Report - User Fee Analysis (Report).
BACKGROUND
Per California State Constitution Article XI, Section 7 cities may establish regulatory fees for services, provided such fees do not exceed the estimated reasonable cost of providing those services. Accordingly, the City has established various Code Enforcement fees to recover code enforcement inspector time. The subject fees were last updated by Council in April 2008.
Current Fees
Currently, the MFS breaks down Code Enforcement fees into (1) flat rate fees for certain activities (such as abatements or preparing a Notice and Order) and (2) hourly fees based upon a total cost recovery figure of $100 per hour for other code enforcement activities. Based on the Study approximately $113,000 is collected annually at current fee amounts, whereas total cost recovery should be $165,000. As such, the City is currently recovering only 68% of the total costs associated with providing services. Should the Council adopt fee levels at 100% cost recovery, approximately $52,000 in additional costs could be recovered.
Proposed Changes
In arriving at total cost recovery figures, the Study analyzed labor costs, indirect labor costs, specific direct non-labor costs, allocated indirect non-labor costs, and allocated indirect organization-wide overhead. Based upon this analysis, the fully burdened hourly rate (i.e. the total cost recovery rate) for Code Enforcement services should be $146 per hour, whereas the rate currently charged is $100 per hour. Rather than continue to charge flat fees for certain activities and an hourly rate for others, Code Enforcement proposes charging an hourly rate of $146 for all activities. Appendix B to the Report includes a comparison of fees to other cities: Bakersfield, Modesto, Sacramento, Stockton, and Long Beach. Hourly fees for similar code enforcement tasks in these cities range from $198 to $275. The Study did not review penalties or citations, and no changes are suggested to those.
1. Based upon the Study, Staff recommends the following changes to the structure and amount of Code Enforcement fees: Delete fees that are no longer used or not needed, such as:
o Family Day Care Annual Inspection
o Registration of Vacant Foreclosed Properties
o Failure to acquire a Specific Building Permit as required by the dated Notice & Order
o Mobile home Rent Review
o Shopping Cart Containment Plan Review Fee
o Solid Waste Recyclers Certification Process
o Vacant Building Plan - Review Fee
2. Reorganized the fees into three sections: (1) General Complaints and Abatements; (2) Rental Housing Related; and (3) Miscellaneous.
3. Add the following new fee categories:
o Citation for lack of Smoke Detector or Carbon Monoxide Detector
o Rental Housing
• Courtesy Re-Inspection
• Penalties for late registration
• Penalties for false statements
o Lien Release Fee - Policy of Insurance of Record (PIRT)
• City Processing Cost
o Updated Tire Disposal Fees
All proposed changes are provided in Exhibit A to the Proposed Master Fee Schedule attached hereto.
ENVIRONMENTAL FINDINGS
The proposed amendments to the MFS, as noted above and on the schedules attached hereto, are determined to be statutorily exempt pursuant to CEQA Guidelines Section 15273(a) because they pertain to meeting operating expenses, including employee wage rates and materials.
LOCAL PREFERENCE
Local preference was not considered because this Resolution does not include a bid or award of a construction or service contract.
FISCAL IMPACT
If approved, the additional fees would improve accurate cost recovery for Code Enforcement services, which is estimated to yield additional annual cost recovery of $51,845 based upon FY 2018-19 figures.
Attachments:
- 556th Amendment to the Master Fee Schedule Resolution
- Master Fee Schedule Exhibit A
- User Fee Analysis Final Report
- NBS PowerPoint