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is $23.50 and does not cover the cost of staff time for issuing a permit and performing an inspection. Some cities have abandoned issuing these types of permits because they are not cost effective. Staff reviewed this proposed change in policy and determined that because these types of projects have health and safety issues related to gas-burning appliances, they should continue to be permitted and inspected. Staff was also concerned that an increase in the cost of permits for water heater and furnace replacements might dissuade some customers from paying for the permit and getting the inspection. Therefore, Staff determined that the cost of the permit for a water heater and a furnace replacement should continue to be partially subsidized, at approximately $50, however, the minimum fee for all other construction would be $85. With the following proposed changes in the Building Division's development related fees, the City will once again achieve its policy of 100% cost recovery for the Building Division: • 35% increase in the building permit fee table, and • the increase in the minimum fee from $23.50 to $85.00 (except plumbing, mechanical and electrical stand-alone permits which will be $50). Planning Division The Planning Division processes all zoning and land use applications in the City; prepares, oversees and reviews all special studies associated with long-range land use objectives and entitlements; works with the development community to facilitate the review of new projects along with supporting the City Council and the Planning Commission. The total cost of all planning services is $3,131,407. Of this amount, $2,244,076 is the costs associated with fee related activities. Currently, the City recovers 4% of these costs; therefore, annually the General Fund subsidizes approximately $2,156,000 of development related activities in this division. Few cities in California do this and most cities seek a cost recovery level in the range of 75% to 100% for planning related services. Staff felt that given that the planning fees are so low that it would not be practical for the City to try and achieve these levels immediately. Instead, the Study recommends a 45.6% cost recovery level which would reduce the annual subsidy by the General Fund by $1,024,174. The City could continue to phase- in the remaining 54.6% in cost recovery levels over time. Staff's recommendation does not include this at this time. Engineering Division The Engineering Division is responsible for overseeing the project development, design, survey, inspection and contract administration for all public improvements including the City's capital improvement program and private improvements (other than the building improvements which are inspected by the Building and Safety Division). The total cost of all engineering services is $3,273,515, of which $1,690,167 is fee related. The City currently recovers approximately 37% of these costs through user fees with a General Fund subsidy of $1,070,710. A cost recovery level of 37% is low for engineering services statewide. Staff recommends full cost recovery (approximately 100%) for this area resulting in approximately $1,052,531 in additional revenues annually. The only fee that would not be 100% cost recovery is the wide load permits. This fee is set by State law and is not 100% cost recovery. The division is also recommending restructuring Page 3 of 8