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Ms. Wagner stated that based on the current estimate of permit volume, the proposed changes could yield potential revenue increases of $350,000 in 2011/12, $700,000 in 2012/13, $1 million in 2013/14 and $2 million in 2014/15. She noted that the Two—Year Operating Budget reviewed earlier does not include these additional revenues. Councilmember Sullivan asked if the budget includes fee forecasts for any of the potentially significant development projects through 2014/15. Ms. Wagner said "no." Councilmember Sullivan said it deserves consideration that as the City contemplates its Housing Element, which carries the potential for a significant number of new units, the fees are currently at 1980 levels. Ms. Wagner stated that the Finance Committee reviewed the report and recommended that Chamber of Commerce and Economic Vitality Committee provide input prior to any action by the Council. Staff recommends proceeding with these reviews in July before bringing the fee update to the Council in August. Councilmember McGovern stated strong support for either moving directly to 100% cost recovery or else changing the fiscal policy. She felt the public was under the impression that development pays for itself and said this is clearly too great a subsidy. She asked what level of cost recovery would be achieved with the current recommendation. Ms. Wagner stated 80% in 2011/12, based on volume. She noted that much higher fees would be realized if certain larger projects come through, as new development fees carry the weightiest increase. While the City does see a much larger volume of permits for existing units, staff typically relies on the applicant's stated value. Councilmember McGovern reviewed the fee comparisons on page 6 of the staff report. She stated significant frustration with the large discrepancies between the City's fees and the average of surrounding jurisdictions'. Vice-Mayor Cook-Kallio concurred but said it would be interesting to see if others are exceeding cost recovery at those rates. She asked what bearing code enforcement has on this, specifically if fees are recovered when unpermitted improvements are discovered after the fact. Community Development Director Dolan said there is a new fee proposed to recover the cost of pursuit for those who evade the permit and inspection process. He also reported that anyone proven to have violated the code after the fact is required to go through the permit process and pay the fees at today's rate. Vice-Mayor Cook-Kallio inquired about smaller items such as water heaters. Mr. Dolan said this is one area where safety concerns take precedence over the goal of cost recovery. Staff has recommended a reduced rate to encourage use of the proper process. Councilmember Thorne suggested it would be worth looking at the actual staff time spent on each sort of project in other cities. Mr. Fialho agreed in theory but said it would be very difficult to accomplish in reality. For the purposes of comparison, the planning process of each jurisdiction is very difficult and no one knows exactly what it takes to process a permit in Dublin or Livermore. Pleasanton's planning process is creative and places considerable emphasis on community involvement, which is substantially different from what other communities utilize. Councilmember McGovern noted that some other communities charge for time and materials. Ms. Wagner confirmed. She explained that the Customer Service Review Team was adamantly opposed to the idea during its review and that such a program requires significant administration. She assured the Council that the fee review included a thorough process of identifying the staff time attached to each permits, isolating the cost, and comparing that with City Council Minutes Page 9 of 10 May 17, 2011