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Finally, a new technology fee is proposed to address the increased costs related to electronic hardware and software licensing, ongoing maintenance fees, and archiving costs, as well as, the cost of upgrading the permit software system, interactive voice response (IVR) system, and document archiving cost were not previously addressed, and are now being consolidated into a single fee. With these proposed changes in the Building Division's development related user fees, the City will once again achieve its policy of 100% cost recovery for the Building Division. 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 residents, businesses and the development community to facilitate the review of new projects; and supports the City Council and the Planning Commission. The total budgeted cost of planning services related to private development and fee related activities in 2014/15FY is $2,012,313. Currently, the City recovers 9.5% ($144,515) of these costs; therefore, the annual General Fund subsidy is approximately $1,867,798. Few cities in California subsidize development fees to such a level 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 it would not be practical for the City to try and reach these cost recovery levels immediately. Instead, the Study recommends a 25% cost recovery level ($503,078). One comment staff received from the business community in 2011 was the potential burden of an increase in planning fees at the initial stages of a project. They proposed a lower recovery rate during the planning stage; deferring a majority of the cost to the building permit stage when projects have financing. Therefore, staff has included 36% of the cost of planning services in the development of the building permit cost recovery rate. This results in the cost recovery rate for planning to increase from its recommended level of 25% to 61%; 25% coming from the planning phase and 36% from the building permit phase of a project's development. This further reduces the annual General Fund subsidy for Planning by $724,433. The cities of Fremont and Walnut Creek have a 15% surcharge on all building permit fees to offset a portion of the Planning Department fees. Our proposed 36% offset by the Building Department of Planning fees is equivalent to a 16.98% surcharge on building permit fees. However, in all cases our proposed fees with the surcharge included are lower than Fremont's and Walnut Creek's building fees without their surcharge included (see the Building and Safety Division Fee Comparison Chart herein). 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 Page 4 of 9