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BACKGROUND The City conducted a fee study of certain development related services based on the premise that there are certain services that the City provides that are of special benefit to an individual or business that should not be a cost or financial burden to the general taxpayer. Additionally, there are certain development related activities by individuals or businesses that require specific additional regulation that are appropriately considered not the financial responsibility of the general taxpayer. One of the City's financial policies is to have development pay 100% of the cost to provide City services. The City hired PRM to prepare a review and analysis of the City's direct and indirect costs associated with the delivery of development related services. Based on the City's accounting records, the analysis tabulated the full cost of providing development related services including both direct and indirect costs. The review and analysis then recommended certain cost recovery levels for each fee based on economic and policy considerations (the "Net Recoverable Costs"). The Net Recoverable Costs were then compared with revenues currently received for these services to determine the recommended cost recovery rate for each service. DISCUSSION The Study presents the cost of providing development related services by individual divisions including building and safety, fire prevention, planning and engineering. The following is a brief summary of their findings by division: Building and Safety Division The Building and Safety Division (Building Division) provides the following services: permit processing, plan checking, building inspections and investigations of complaints regarding potentially dangerous buildings. The City's goal has been to recover 100% of the cost of these services in the fees charged by the Building Division. However, the Study found that the Building Division is currently recovering approximately 88% of the cost of these services. Building permit and plan review fees are based upon the cost, or valuation, of projects. Construction valuation tables are used to determine the construction value for all new construction. The new construction valuation table is adjusted annually by the Chief Building Official for the change in the new construction index. In 2007/08FY, the new construction permits' valuation represented approximately 25% of the valuation for all permits issued by the Building Division. Today, new construction permits' valuation represents only approximately 10% of all permits issued by the Building Division. For all other permits other than new construction, the valuation of the project is provided by the applicant. Once valuation is determined, either by using the new construction valuation table or by the applicant, staff refers to a building permit fee table (based on the valuation) to determine permit fees. Upon a review of the activity cost associated with various permits, it was determined that the building permit fee table should be increased by 35% with the minimum permit fee set at $85. A minimum fee is typically charged for all permits other than building permits, such as electrical, mechanical or plumbing permits, such as water heater replacements and other small projects. Currently the minimum fee Page 2 of 8